The Renewables Obligation (RO) places an obligation on licensed electricity suppliers in the UK to source a proportion of their supply to customers from eligible renewable sources.
The obligation is set annually by the Department for Business, Energy and Industrial Strategy (BEIS). The obligation period runs from 1 April to 31 March and the obligation level is published at least six months prior, by 1 October of the previous year.
It is based on a prediction of the amount of electricity that will be supplied in the UK and the number of Renewables Obligation Certificates (ROCs) that will be issued to eligible renewable generators.
Obligation period (1st April - 31st March)
Buy-out price (per ROC)
Obligation level for England & Wales and Scotland (ROCs/MWh)
Obligation level for Northern Ireland (ROCs/MWh)
The recommended methodology for calculating electricity supply data is given in Appendix 5 of our Guidance for Suppliers. For reference, this includes:
- Supply to customers connected directly to a licensed distribution network
- Supply to customers connected to a licence-exempt distribution network
- Supply to customers connected directly to the transmission system.
A supplier’s obligation is calculated by:
Supplier obligation (ROCs) = Total electricity supplied (MWh) x Obligation level (ROCs/MWh)
How suppliers can meet their obligations
Suppliers can meet their annual obligation by presenting ROCs, making a payment into a buy-out fund or a combination of the two.
Where no electricity has been sold during an obligation period, a zero sales declaration must be made instead. We set the buy-out price per ROC, adjusted with the Retail Prices Index annually.
Our scheme administration costs are recovered from the buy-out fund. The remaining buy-out fund together with any interest accrued is then redistributed to suppliers in proportion to the number of ROCs each presented.