Renewable Obligation Certificates. ROC
The Renewables Obligation (RO) and the Renewables Obligation Scotland (ROS) were introduced on the 1st April 2002 by the Government to encourage the development of renewable energy and help reduce carbon emissions by making it a statutory requirement for all licensed electricity suppliers, to produce evidence that they source a pre determined proportion of their power from renewable generation annually or else pay a penalty. The obligation runs until 2027 when all suppliers will have to ensure that they meet the target of 15.4 % of their power generation, from renewable sources.
The office of Gas and Electricity Markets (Ofgem) is responsible for implementing, monitoring, and enforcing compliance with the scheme
Ofgem require suppliers to produce evidence of their compliance of the scheme by producing green certificates referred to as Renewable Obligation Certificates (ROCs) Each ROC represents one Megawatt Hour (MWh, 1,000 units or 1,000 kWh) of renewable electricity generated. ROC's are awarded to renewable generators who are accredited with OFGEM. Therefore if you are a renewable generator and are accredited with OFGEM to receive ROCs for every MWh of electricity you generate, the ROCs can be sold to electricity companies/suppliers providing an annual income. This would be in addition to revenue received on all exported units of electricity, and help reduce payback time. It is important to note that you are eligable to claim ROC's on all the energy you produce, even if you use it yourself!
The government sets the values of ROCs the price increases each year with inflation. At the moment (2006-2007) the “Buy Out” price as its called, stands at £33.24 per megawatt hour (MWh). ROCs are bought and sold in the market place by large generators, traders, brokers and electricity suppliers. Market prices vary on a daily basis. To see recent ROC prices look at the Non-Fossil Purchasing Agency website http://www.nfpa.co.uk/
Some recently announced news which is extremely benefical to small generators is the announcement that from the 1st of April 2009, small turbines (<50 kW) and other sources of microgeneration, will be eligible for "Double ROC's). This is fantastic news for small turbines, and greatly improves the payback period.
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