Renewables Obligation: ROCs presented and Redistribution of Buy-Out Fund 2021-22

Reports, plans and updates

Publication date

Industry sector

Supply and Retail Market

Scheme name

RO

Total obligation: 127,815,053 ROCs

The Renewables Obligation (RO) requires licensed electricity suppliers to source a proportion of the electricity they supply to UK customers from renewable sources. We set suppliers’ obligations as a number of Renewables Obligation Certificates (ROCs). The obligation levels for 2021/22, announced by the Department for Business, Energy & Industry Strategy (BEIS) on the 1 October 2020, are:

  •  0.492 ROCs per MWh of electricity supplied to customers in England, Wales and Scotland
  •  0.194 ROCs per MWh of electricity supplied to customers in Northern Ireland.

Using these obligation levels and multiplying by the total electricity supplied (MWh) to UK customers during this obligation period (1 April 2021 – 31 March 2022), the total obligation for 2021/22 is 127,815,053 ROCs. Split out for each obligation this is:

  • 114,909,760 ROCs in England and Wales
  • 11,436,634 ROCs in Scotland
  • 1,468,659 ROCs in Northern Ireland.

Suppliers will have until 1 September 2022 meet their obligations for 2021/22 (31 August for buy-out payments) by opting to either:

  • Present ROCs to us;
  • Make a buy-out payment of £50.80 per ROC; or
  • Use a combination of ROCs and a buy-out payment.

Any suppliers who do not meet their obligations in full by the end of 1 September will need to make a late payment by 31 October.

We have recently redistributed the RO buy-out fund for 2021/22. Details of the obligations, ROCs presented and total payments made for each RO scheme are shown in the Table 1 below.

Table 1

Obligation

Total Obligation (ROCs)

ROCs presented by suppliers

Percentage of obligation met by ROCs

Buy-out payments made by suppliers (rounded to nearest pound)

Buy-out redistributed

England & Wales (RO)

114,909,760

98,040,902

85.32%

£703,309,922

£696,865,275

Scotland (ROS)

11,436,634

9,822,889

85.89%

£72,207,252

£71,545,569

Northern Ireland (NIRO)

1,468,659

1,448,368

98.62%

£1,030,783

£1,021,344

Total

127,815,053

109,312,159

85.52%

£776,547,957

£769,432,188

 

Suppliers that presented ROCs towards their obligations received buy-out fund recycle payments on 28 October 2022.

The amounts redistributed are shown in the far-right column in Table 1. We reached these values by withdrawing our and Northern Ireland Authority for Utility Regulation’s (UR) administration costs and rounding down the redistribution amounts to the nearest whole pound. Suppliers received approximately £7.04 for each ROC they presented. The proportion of the total ROCs each supplier presented, and therefore the share of buy-out payments they received, is shown in Table 2 (rounded to 2 decimal places).

 

There was a combined shortfall of £163,399,058.88 in the England & Wales, Scotland and Northern Ireland buy-out funds. This was due to thirty-six suppliers not meeting their total obligations by the above deadlines. These suppliers consequently owe late payments.

The deadline for suppliers to make late payments was 31 October 2022 and we will redistribute them before 1 January 2023. This will include interest paid by the suppliers at an annualised rate of 6.75% (5% + Bank of England base rate). When we redistribute the late payments we will also confirm the final recycle value, which will include an extra amount on top of the £7.04.

For more information, contact: RECompliance@Ofgem.gov.uk.

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