Wind Energy Questions – Renewable Obligation Certificates

Posted by EcoFriendly

Nov 2

The Renewables Obligation (RO) is the government’s main mechanism for supporting renewable energy.

Introduced in April 2002, it provides a substantial market incentive for all eligible forms of renewable energy. Renewable energy suppliers are required to supply a proportion of their electricity from renewable sources evidenced by the presentation of Renewable Obligation Certificates (ROCS) or pay a buy out fee. As a result of this requirement, the ROCS secured by renewable energy generators have a financial value and are bought and sold.

Onshore wind power is currently economic however it is sensitive to changes to the Renewables Obligation. Other technologies such as wave and tidal are not currently economic and offshore wind is very marginal.

Currently the Renewable Obligation only provides support until 2027 and with the significant capital costs involved in building renewable energy projects the further time moves on, the shorter the period of time between operation and the end of the Renewable Obligation timescale. This has the knock on effect of making some schemes unviable particularly when reaching the 2012/2013 period onwards.

This summer, the government produced a consultation Renewable Energy Strategy asking for feedback on what changes should be made to the Renewable Obligation in light of the EU 2020 renewable energy target. The British Wind Energy Association is lobbying for an extension of the Renewable Obligation to at least 2040 to promote the growth of renewable energy generation.

In order to encourage less developed renewable energy technologies such as wave and tidal energy, the government is proposing to amend the existing system. Currently every renewable energy generator receives 1 ROC per MWh electricity generated, however under the new system less economic technologies will receive more than 1 ROC per MWh and the most economically viable technologies will receive less.

The draft banding levels are set out below:

Micro – generation (with the exception of micro landfill, sewage gas and hydro – 2 ROCs/ MWh
Hydro-electric – 1 ROC/ MWh
Onshore Wind – 1 ROC/ MWh
Offshore Wind – 1.5 ROCs/ MWh
Wave – 2 ROCs/MWh
Tidal Stream – 2 ROCs/ MWh
Tidal Impoundment – Tidal Barrage – 2 ROCs/ MWh
Tidal Impoundment – Tidal Lagoon – 2 ROCs/ MWh
Solar Photovoltaic – 2 ROCs/ MWh
Geothermal – 2 ROCs/ MWh
Geopressure – 1 ROC/ MWh
Landfill Gas- 0.25 ROC/ MWh
Sewage Gas – 0.5 ROC/ MWh
Energy from Waste with CHP – 1 ROC/ MWh
Gasification/ Pyrolysis – 2 ROCs/ MWh
Anaerobic Digestion – 2 ROCs/ MWh
Co-firing of Biomass – 0.5 ROC/ MWh
Co-firing of Energy Crops – 1 ROC/ MWh
Co-firing of Biomass with CHP – 1 ROC/ MWh
Co-firing of Energy Crop with CHP – 1.5 ROCs/ MWh
Dedicated Biomass – 1.5 ROCs/ MWh
Dedicated Energy Crops – 2 ROCs/ MWh
Dedicated Biomass with CHP – 2 ROCs/ MWh
Dedicated Energy Crops with CHP – 2 ROCs/ MWh