What is the Renewables Obligation (RO)?

The RO is the main support scheme for renewable electricity projects in the UK. It places an obligation on UK suppliers of electricity to source an increasing proportion of their electricity from renewable sources.

A Renewables Obligation Certificate (ROC) is a green certificate issued to an accredited generator for eligible renewable electricity generated within the United Kingdom and supplied to customers within the United Kingdom by a licensed electricity supplier. One ROC is issued for each megawatt hour (MWh) of eligible renewable output generated.

The Renewables Obligation, the Renewables Obligation Scotland and the Northern Ireland Renewables Obligation are designed to incentivise renewable generation into the electricity generation market. These schemes were introduced by the Department of Trade and Industry, the Scottish Executive and the Department of Enterprise, Trade and Investment respectively and are administered by the Gas and Electricity Markets Authority (whose day to day functions are performed by Ofgem).

The Renewables Obligation Order came into effect in April 2002, as did the Renewables Obligation Order (Scotland). The Renewables Obligation (Northern Ireland) Order came into effect in April 2005.  These Orders have been and are subject to regular review.

The Orders place an obligation on licensed electricity suppliers in England and Wales, Scotland and Northern Ireland to source an increasing proportion of electricity from renewable sources. In 2005-06 it was 5.5 per cent (2.5 per cent in Northern Ireland). In 2006-07 the obligation is set at 6.7 per cent (2.6 per cent in Northern Ireland).

Suppliers meet their obligations by presenting sufficient Renewables Obligation Certificates (ROCs). Where suppliers do not have sufficient ROCs to meet their obligations, they must pay an equivalent amount into a fund, the proceeds of which are paid back on a pro-rated basis to those suppliers that have presented ROCs.  The Government intends that suppliers will be subject to a renewables obligation until 31 March 2027.

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