MRW provides answers to some of the key questions about RO ahead of the banding review.
What is the Renewables Obligation?
In brief it is the obligation for electricity companies to supply a specified percentage of their electricity from renewable energy sources. It is the major support scheme for renewable electricity generating projects in the UK. The Renewables Obligation (RO) legislation came into effect in England, Wales and Scotland in 2002, and Northern Ireland in 2005.
What are ROCs?
Renewables Obligation Certificates (ROCs) are green certificates issued to companies generating renewable electricity in the UK. ROCs are sold to electricity companies to help them meet their RO. Electricity companies present ROCs in order to prove the ‘green’ integrity of a proportion of their electricity. If the company does not have enough ROCs to meet their obligation they pay a fee. This fee is paid into the RO fund, the proceeds of which are paid back to suppliers that do meet their obligation criteria.
What are they reviewing?
The Department of Energy and Climate Change is looking at the bands applied to generating stations. Different technologies are allocated into bands. They define the amount of electricity that has to be generated to qualify for a ROC. For example: landfill gas is entitled to 1 ROC for every 4 MWh of electricity generated. Gasification is entitled to 1 ROC for 1 MWh, whereas anaerobic digestion and advanced gasification are entitled for 1 ROC for every half a MWh. The term ‘Double ROCs’ means two ROCs are issued for 1 MWh of electricity.
What does it mean?
The review could mean a change in the number of ROCs that a renewable technology is allocated per MWh of electricity.
What’s the problem?
These reviews, while they offer a prospect of increased support for a generating technology, could also result in a reduction of ROC entitlement. This introduces insecurity into the market, holding up proposals for facilities by stalling negotiations for finance and contracts. In the renewable energy industry where securing finance is integral to the development of infrastructure, untimely reviews can put projects on the back burner indefinitely.
Research by Rosaline Hulse