Renewables Obligation: Call for Evidence on introducing Fixed-Price Certificates into the UK-wide Renewables Obligation schemes

Overview

The RO has incentivised UK renewable electricity generation since 2002. It is now closed to new applications, but stations that accredited in the early years of the scheme receive support until 2027. Later stations are supported for 20 years or until final closure of the scheme on 31 March 2037, whichever is the earliest. Three separate complementary obligations cover England & Wales, Scotland, and Northern Ireland.  

The scheme puts an obligation on UK electricity suppliers to present a certain number of RO Certificates (ROCs) to Ofgem in respect of each MWh of electricity they supplied to their customers during an obligation year. Generators obtain ROCs free of charge from Ofgem in relation to the renewable electricity they generate. Suppliers buy these ROCs from generators (or traders), giving generators extra income in addition to the wholesale price of their renewable electricity. Instead of presenting ROCs, suppliers may make a cash payment into a buy-out fund, which is then recycled to suppliers who presented ROCs. The cost of the RO to suppliers is passed on to consumers through their electricity bills. 

This Call for Evidence outlines the case for transition to a Fixed Price Certificate (FPC) model in 2027, to provide cost and revenue certainty to stakeholders in the latter part of the scheme, as price volatility is expected to emerge when generating stations start to retire from the scheme. It seeks views on:  

• Potential FPC models featuring a central payment and settlement counterparty; 
• Frequency and sequencing of FPC issuing, obligation setting, and settlement;  
• Pricing arrangements;  
• When FPCs should be introduced.  

This Call for Evidence is issued jointly between the UK Government, the Scottish Government and the Northern Ireland Executive. It is open for 10 weeks from 31 July to 9 October 2023.

Read the Call for Evidence document on GOV.UK. Please use the this webpage to submit your responses.  

What happens next

Responses provided to this Call for Evidence will be analysed and used to develop detailed policy proposals, which will be consulted on by all relevant authorities as appropriate in due course.