Renewables Obligation closes to new applications after 15 years

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The Renewables Obligation (RO) scheme – one the UK government’s main support mechanisms for large-scale renewable electricity projects – has closed to new generating capacity.

Since being established in 2002, the percentage of the UK’s electricity generated from low carbon energy has increased from 1.3% to 23.5%. The RO played a key role in contributing to this increase.

The RO places an obligation on licensed suppliers to source an increasing proportion of their electricity from renewable sources.

To date, in excess of 23,500 generating stations comprising 25GW of installed capacity have been accredited, which includes 9.3GW onshore wind, 5GW offshore wind and 5.3GW solar PV.

Operators of accredited generating stations are issued certificates (ROCs) based on the amount of electricity they generate for a period of 20 years.

The certificates are bought and traded by market participants and ultimately presented to Ofgem by suppliers as proof they have met their obligation.

During 2015/16 90.4 million ROCs were issued on the basis of 69.1 TWh of renewable electricity generation.

The closure of the scheme, announced in July 2011, takes effect from 31 March 2017, although some installations may qualify for a grace period.

These grace periods are available for stations that have not commissioned by scheme closure and meet certain legislative criteria.

New large-scale renewable electricity installations have the opportunity to access support under the government’s Contracts for Difference scheme.

Luke Hargreaves, Head of Renewable Generation at Ofgem E-Serve, said: “The closure of the scheme does not affect capacity as this is already accredited.

“The Renewables Obligation scheme will run for another 20 years. We will continue to issue ROCs and monitor compliance on a scheme that is worth in excess of £4.5bn a year. We will also determine any applications made prior to closure and any subsequent grace period applications.

“Any scheme participant wishing to make changes to their accredited installation should refer to our Guidance for Generators on our website.”

Energy Minister Jesse Norman said: “The Renewables Obligation has helped to move the UK from having barely any clean energy 15 years ago to having nearly a quarter of all its electricity coming from renewable technologies.

“This government remains fully committed to cleaning up our energy system and our support will continue through the more competitive Contracts for Difference scheme. This is designed to drive down costs and give companies the support and certainty they need to attract investment and get new projects off the ground.”

More information about the grace periods for applications can be found on the Ofgem website.