The Renewables Obligation (RO) is the Government's main mechanism for supporting the generation of renewable electricity. Since its introduction in 2002, it has stimulated growth in this sector: capacity has more than doubled, and a project pipeline of more than 11 gigawatts is in place across the UK.
However, there are constraints on the availability and use of the cheaper forms of renewables. So to generate more than 10 percent of electricity from renewable sources, and move towards the Government's long-term aspirations for renewable energy, other technologies such as offshore wind and biomass need to come forward.
The Energy review 2006: 'The energy challenge' announced a number of proposals for long-term reform of the RO. An initial consultation: Reform of the Renewables Obligation & Statutory Consultation on the Renewables Obligation Order 2007 was published in October 2006, in two parts. The first part covered the changes in the Energy review. The second part covered a number of technical and administrative changes, which have now been introduced through the Renewables Obligation Amendment Order 2007.
A further consultation on long-term reform of the Renewables Obligation, published on 23 May 2007, set out the proposals in more detail, alongside the Energy white paper 2007: ‘Meeting the energy challenge’. The consultation closed on 6 September 2007 and stakeholders' responses were published.
The Government published a response on 10 January 2008, setting out decisions on banding, alongside the publication of the Energy Bill.
On 26 June 2008, the Government published a statutory consultation on the Renewables Obligation Order 2009, setting out detailed proposals on how we will implement banding and the associated changes in the statutory order. This consultation closed on 30 September 2008.
The Government response to the consultation setting out our decisions on the detail of implementing banding, was published on 2 December 2008. A draft Renewables Obligation Order 2009 was published alongside the Government response.
The Renewable Energy Strategy (RES), published on 15 July 2009, included announcements on expanding and extending the RO to enable it to deliver close to 30% renewable electricity or more by 2020.
The consultation on Renewable Electricity Financial Incentives, published alongside, sets out further details on these changes. It also includes proposals for changes to the RO to be introduced over the longer term in order to improve its effectiveness, efficiency and stability.
Review of support for offshore wind
As part of the Budget 2009, the Chancellor announced that we would be reviewing the level of RO support for offshore wind.
The decision to launch an early review was based on evidence provided to DECC, including a report produced by Ernst & Young on our behalf. We published this report on 27 April 2009 and it is available below:
Following the conclusion of the review process, including a consultation on proposals to award a higher level of support to offshore wind projects meeting certain conditions, we announced in the Government Response that all offshore wind projects granted full accreditation between 1 April 2010 and 31 March 2014 would receive 2 ROCs/MWh.
Further information on this announcement is set out in the Q&A document below:
Calculating the Obligation
Article 12(4) of the Renewables Obligation Order 2009 requires that the Secretary of State must publish, by the 1st October preceding an obligation period, the number of renewables obligation certificates that a designated electricity supplier is required to produce in respect of each megawatt hour of electricity that it supplies to customers in England and Wales during that period in order to discharge its renewables obligation for that period.
The Department can today confirm that the Obligation level for supplies to customers in England and Wales for the period running from 1st April 2010 to 31st March 2011 has been set by using Calculation B and will be 0.111 ROCs per MWh (megawatt hour).
Details of how the Obligation level was calculated can be found in the document below:
Review of the removal of the requirement for ‘sale and buyback’ agreements: 18 January 2010.
In April 2007 an administrative simplification was made to the Renewables Obligation (RO) legislation which removed the requirement for generators who consume their own electricity to enter into ‘sale and buyback’ agreements in order to claim Renewables Obligation Certificates (ROCs). Ministers agreed to conduct a review of the removal of the requirement once the legislation had been in force for 2 years. The results of the review are set out in the document below.