From: Department for Energy
Security and Net Zero
Published
31 July 2023
Summary
We're seeking evidence and views on the case for introducing
Fixed Price Certificates into the UK-wide Renewables Obligation
schemes.
This consultation closes at 11:59pm on 9 October
2023
Consultation description
The Renewables Obligation (RO) has incentivised UK renewable
electricity generation since 2002. It is closed to new
applications, however:
- stations that accredited in the early years of the scheme
will receive support until 2027
- later stations are supported for 20 years or until final
closure of the scheme on 31 March 2037, whichever is the earliest
Three separate complementary obligations cover England and Wales,
Scotland, and Northern Ireland.
The scheme puts an obligation on UK electricity suppliers to
present a certain number of RO certificates (ROCs) to Ofgem in
respect of each MWh of electricity they supplied to their
customers during an obligation year:
- generators obtain ROCs free of
charge from Ofgem in relation to the renewable electricity they
generate
- suppliers buy these ROCs from
generators (or traders), giving generators extra income in
addition to the wholesale price of their renewable electricity
- instead of presenting ROCs, suppliers may
make a cash payment into a buy-out fund, which is then recycled
to suppliers who presented ROCs
- the cost of the RO to suppliers is passed on
to consumers through their electricity bills
This Call for Evidence outlines the case for transition to a
Fixed Price Certificate (FPC) model in 2027, to provide
cost and revenue certainty to stakeholders in the latter part of
the scheme, as price volatility is expected to emerge when
generating stations start to retire from the scheme. It seeks
views on:
- potential FPC models featuring a
central payment and settlement counterparty
- frequency and sequencing of FPC issuing, obligation
setting, and settlement
- pricing arrangements
- when FPCs should be introduced
The Call for Evidence is issued jointly by the UK Government, the
Scottish Government and the Northern Ireland Executive.
Please submit your
responses using the online survey if possible.
Read our consultation privacy
notice.
See also the Ofgem
Renewables Obligation page.
Documents
Introducing
Fixed Price Certificates into the UK-wide Renewables Obligation
schemes: a call for evidence
PDF, 562
KB, 30 pages
Ways to respond
Respond online
