Electricity storage under the Renewables Obligation

Luke Hargreaves photo

Luke Hargreaves

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Generation and Wholesale Market

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Part of Ofgem’s role is administering a number of environmental programmes. One such scheme is the Renewables Obligation (RO). This is one of the Government’s main policies to encourage the generation of renewable electricity.

Under this scheme, we accredit eligible generators and issue Renewables Obligation Certificates (ROCs) for the electricity that they generate. The RO supports renewable generators as they are able to sell ROCs to suppliers, traders or other parties, in addition to the electricity they produce. Licensed electricity suppliers ultimately have to buy the certificates to demonstrate compliance under the scheme. Even once an installation has been accredited, it has to remain compliant under the scheme’s rules, especially whenever any changes are made to it. 

Over the past year or so there has been heightened interest in locating electricity storage systems at renewable installations. Today I’m pleased to say that we have made an important decision concerning some co-located storage facilities. 

We have determined that the arrangements in place at several commercial scale solar installations allow for ROCs to be claimed on all the renewable electricity generated, including any that is used to charge the storage devices.

Electricity storage could play a bigger role in future in helping to manage supply and demand. As with any application under the scheme, these decisions have been made based on the cases that were put to us by generators. However, it is good to see that storage can be successfully deployed and accreditation retained under the existing legislative framework. 

Storage and the smart systems and flexibility plan

Our decision sits alongside other changes to help storage, which we announced with Government in the summer as part of the Smart Systems and Flexibility Plan. They include defining storage as a distinct form of generation in licensing and legislation, and enabling storage to stop paying certain levies charged to end users, which fund Government programmes.  

Around 550MW of storage has contracted to come online by 2020, and a lot of that may locate next to renewable energy generators. We expect there will be more applications from developers who have co-located storage alongside generation and wish continue to receive support under the Government’s environmental schemes.

Guidance for the industry

Our role is to assess changes to installations only once they have been made, but we are keen to help industry understand the schemes we administer. Later in the year, we plan to publish bespoke guidance on key storage considerations under the RO and Feed-in Tariff schemes. We will seek stakeholder feedback as part of this. In the meantime, if any developers would like to discuss RO accreditations and storage with us, they should contact: renewable@ofgem.gov.uk