If the site is an “eligible own use generator” a “Sell and Buy Back electricity agreement” needs to be put in place. When the intermediary is a licensed electricity supplier a contract is put in place between them (acting as the holder of the electricity licence) and the generator
This document states that the electricity generated by the renewable plant is sold to the intermediary (as the electricity supplier) and then simultaneously the intermediary sells it back to the generator for the generators eligible own use.
In practice this does not occur as the generator simply supplies the electricity to himself for his own use. However, under the RO legislation the generator must have his electricity supplied by a licensed supplier to make that electricity eligible for ROCs, hence the Sell and Buy Back Agreement.
A Copy of this agreement plus the confirmations that detail the names and addresses of the parties, the volume of electricity sold and the price applying to that electricity are then sent to Ofgem.
Many customers get confused between the price for the ROCs and the prices detailed in the Buy and Sell Back Agreement for electricity.
The Buy and Sell Back Agreement is an administrative necessity and as the price of the electricity detailed in the contract is applied to both parties the transaction cancels itself out so no money (or electricity) changes hands.
The Buy and Sell back is in no way related to the ROCs. The ROC price agreed between the Client and INTERMEDIARY is detailed within a separate “Management Services Agreement”.
The ROC price agreed between the Client and an intermediary / agent is detailed within a separate “Management Services Agreement”.
The last document the customer receives is the “Management Services Agreement”. This is a contract between the customer and intermediary that details the term of the agreement, the services that the intermediary will provide to the customer and the price the customer will receive for his ROCs
This commercial arrangement is usually for a period of 5 years although the customer can terminate the agreement either immediately, if there is a material breach of the contract, or at any time for any reason by giving 3 months notice.
It is important that the intermediary receives all of the information and that the customer signs it, as Ofgem will not process the application until the intermediary has provided them with copies
Once Ofgem is in receipt of all of the relevant information they can begin the accreditation process. The accreditation covers Levy Exemption Certificates (LECs) and Renewable Energy Guarantee of Origin (REGO). Home