ROCs
Renewable Obligations
The Renewables Obligation Order came into force in April 2002. It required power suppliers to obtain a specified proportion of the electricity they supply to their customers from renewable sources. Currently the government has a target of 15% of the country’s energy consumption to be generated from renewables by 2020.
Those generating renewable energy are entitled to receive a Renewables Obligation Certificate (ROC) for each MWh of electricity generated. These certificates can then be sold to suppliers, in order to fulfill their obligation. Suppliers are required to produce evidence of their compliance with this obligation to Ofgem. Evidence can be via Renewable Obligations Certificates (ROCs). Each ROC represents one megawatt hour (1,000 units) of electricity generated from eligible sources. Suppliers of electricity can either provide certificates sufficient to cover the required percentage of their output, or they pay a ‘buyout’ price for any shortfall. All the monies received from buyout payments are distributed back to those suppliers submitting Rocs in proportion to the number they submit. The buyout price is set each year by Ofgem.
ROC Claiming & Values
To claim a ROC you must be accredited with Ofgem and the ROCs will be included on the Renewables and CHP register. Frequently the purchaser of the electricity from a renewable generating plant will also acquire the ROCs, although this is not necessarily the case. The ROC market does vary and current prices per ROC are in the order of £40 to £50.
“Double ROCs”
From 1st April 2009, certain technologies have been entitled to additional Renewable Obligation Certificates (ROCs). These technologies are deemed to require greater financial support to secure viability and sensible investment returns.
| Generation Type | ROCs/MWh |
|---|---|
| Onshore Wind | 1 |
| Hydro electric | 1 |
| Offshore Wind | 1.5 |
| Dedicated biomass with CHP | 2 |
| Dedicated energy crops with CHP | 2 |
| Wave | 2 |
| Tidal | 2 |
| Anaerobic Digestion | 2 |
| Solar voltaic | 2 |
| Micro-Generation (?50kW) | 2 |
A review of the banding structure is underway and the level and basis for payments of “ROCs” will change. A consultation document is due from DECC in Autumn 2011.