The Renewables Obligation and ROCs
The Renewables Obligation (RO) is a mechanism designed to support large-scale renewable electricity generation as part of the energy transition. The RO obliges all energy suppliers to source a percentage of the total electricity they supply to end users from renewable sources. The RO was first introduced in 2002, replacing the previous Non-Fossil Fuel Obligation. Small-scale renewable generation was supported instead by the Feed-In Tariff mechanic.
Electricity suppliers demonstrate that they have sourced a specified proportion of their electricity from renewable sources through the use of Renewables Obligation Certificates (ROCs). An ROC is issued to the operator of renewable generation, allowing them to subsequently issue a certificate of authentication for each MWh of power they generate and sell.
Every month, these generators report to Ofgem how much renewable electricity they have generated in MWh. They are then issued with certificates that are sold to suppliers, giving them an additional income on top of the wholesale price of the electricity sold.
Ofgem then tallies the ROCs presented by suppliers against their total electricity sales to ensure that they have met their Renewable Obligation. Those that fail to report or do not present enough ROCs must pay a penalty, known as the buy-out price.
Any generator with a total renewable capacity above 5MW can apply for RO accreditation.
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