Closed call for evidence

Introducing Fixed Price Certificates into Renewables Obligation schemes: call for evidence

From:
Department for Energy Security and Net Zero
Published
31 July 2023

Summary

We're seeking evidence and views on the case for introducing Fixed Price Certificates into the UK-wide Renewables Obligation schemes.

This call for evidence ran from
to

Call for evidence description

The Renewables Obligation (RO) has incentivised UK renewable electricity generation since 2002. It is closed to new applications, however:

  • stations that accredited in the early years of the scheme will 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 and 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

The Call for Evidence is issued jointly by the UK Government, the Scottish Government and the Northern Ireland Executive.

Please submit your responses using the online survey if possible.

Read our consultation privacy notice.

See also the Ofgem Renewables Obligation page.

Documents

Introducing Fixed Price Certificates into the UK-wide Renewables Obligation schemes: a call for evidence

PDF, 562 KB, 30 pages

Published 31 July 2023