Government response to consultation on renewables obligation
December 12, 2008
The Government has published its response to the statutory consultation on the Renewables Obligation (RO) Order 2009.
The RO is crucial to the success of renewable sources of energy in the UK. The RO will continue as the principal mechanism for giving incentive to large-scale renewable electricity generation in the UK. It is also a key part of the Government's programme for cutting carbon dioxide emissions, as well as other policy measures such as the EU Emissions Trading Scheme, and future mechanisms such as "Feed-in Tariffs" and Renewable Heat.
The RO requires electricity suppliers to source an increasing proportion of their electricity from renewable sources, or pay a specified buy-out price. Since it was introduced in 2002, the proportion of electricity sales attributed to eligible renewable has increased from 1.5% in the year prior to its introduction to 4.9% in 2007. Further capacity is already being installed.
Banding the obligation is a potentially important change that eradicates the link between quantity of electricity generated and the number of Renwables Obligation Certificates (ROCs) received per Megawatt Hour (MWh). This change was necessary to enable early stage technologies, which will now receive more than 1 ROC/MWh, to enter the market.
The Government has undertaken three consultations on RO Banding to date - this document sets out the decisions taken on the technical issues discussed in the final statutory consultation. The consultation attracted 112 responses from generators, suppliers, trade associations, non-energy concerns and individuals.
Even though the RO has been a success since its introduction, there is scope to make it even more efficient and effective, and this is what this consultation process has been about.
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