Bonus Free Report – UK Renewable Energy Incentives (ROCs) 2011-12
The UK Renewable Energy Incentives (ROCs) 2011-12 report contains:
- An update on the UK ROCs banding and payment rates
- An explanation of the UK ROCs subsidy
- Details on how the ROCs subsidy is calculated and applied.
To get your copy of the UK Renewable Energy Incentives (ROCs) 2011-12 report, click on the orange button below:
What is the Renewable Obligation?
The Renewable Obligation (RO) is the main incentive funding support mechanism for renewable electricity projects in the UK. Smaller scale generation is mainly supported through the Feed-In Tariff scheme (FITs).
When was the Renewable Obligation first introduced?
The RO came into effect in 2002 in England and Wales and in Scotland and in 2005 in Northern Ireland. It places an obligation on UK electricity suppliers to source an increasing proportion of electricity they supply to customers from renewable sources. The obligation level is reviewed and is set at new levels each year. For information on current RO levels visit the Department of Energy and Climate Change website, or for 2011-12 download our report.
The cost to consumers is limited by a price cap and the Obligation is guaranteed in law until 2027.
Is there a Band for Anaerobic Digestion?
Yes. There is a ROCs band for Anaerobic Digestion Electricity generated from the gas formed by anaerobic digestion of material which is neither sewage nor landfill. This band does not, however, include electricity generated from such fuels in a calendar month in which the generating station has generated electricity partly from fossil fuel.
How does it work?
Eligible renewable generators receive Renewables Obligation Certificates (ROCs) for each MWh of electricity generated. These certificates can then be sold to suppliers, in order to fulfil their obligation. Suppliers can either present enough certificates to cover the required percentage of their output, or they can pay a ‘buyout’ price for any shortfall. All proceeds from buyout payments are recycled to suppliers in proportion to the number of ROCs they present. The buyout price is set each year by Ofgem, and ROC trading is administered by Non-Fossil Purchase Agency Ltd.
Electricity suppliers meet their obligations under the Renewables Obligation by presenting sufficient Renewables Obligation Certificates (ROCs). Where suppliers do not have sufficient ROCs to meet their obligations, they must pay an equivalent amount into a fund, the proceeds of which are paid back on a pro-rata basis to those suppliers that have presented ROCs.
Is it the Exactly the Same for Northern Ireland?
The Northern Ireland Renewables Obligation (NIRO) is the main support mechanism for encouraging increased renewable electricity generation in Northern Ireland. It operates in tandem with the Renewables Obligations in Great Britain – the ‘ROS’ in Scotland and the ‘RO’ in England & Wales. This amounts to a UK-wide market for Renewables Obligation Certificates (ROCs) issued to generators under the Obligations.
How Much has it Changed Since it was Introduced?
Prior to 1 April 2009 all renewable electricity generation technologies received 1 Renewables Obligation Certificate (ROC) for every megawatt hour (MWh) generated. On 1 April 2009, banding levels which remain with adjustments, but essentially providing different levels of support for renewable generation depending on the cost of the technologies involved. All microgeneration (up to 50kW) was increased to 2 ROCs regardless of technology. On 1 April 2010 additional ROCs were introduced for wind, hydro and photovoltaic technologies. On 1 April 2011 additional ROCs were introduced for Anaerobic Digestion.
The ROCs funding instrument implements the UK government’s powers under the Utilities Act 2000 to impose an obligation on licensed suppliers to source an increasing proportion of electricity from renewable sources. These powers had effect from 1 April 2002 in Great Britain and from 1 April 2005 in Northern Ireland. The Office of Gas and Electricity Markets (OFGEM) is responsible for ensuring compliance with the obligation.
These are Extra Costs on the Electricity Suppliers. How do they Get their ROCs Payouts Back?
The actual obligation for each supplier is calculated by applying a percentage to that supplier’s total electricity sales to customers in the UK during each obligation year. The electricity power suppliers pass on their RO costs to their customers. This is done by a general charge on standard electricity contracts and by selling “green” renewable power to customers willing to pay extra. Supplies to customers outside the UK are not eligible for ROCs.