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What is the Renewables Obligation?

The Renewables Obligation requires licensed electricity suppliers to source a specific and annually increasing percentage of the electricity they supply from renewable sources. The current level is 9.1% for 2008/09 rising to 15.4% by 2015/16. This is set out in the Renewables Obligation Order.

It is expected that the Obligation, together with exemption from the Climate Change Levy for electricity from renewables, will provide support to industry of up to £1bn per year by 2010.

Eligible renewable sources

At the end of 2007 generation from renewable sources eligible under the Obligation stood at 4.9%. This rises to 5% if non-eligible sources are included.  Source:  BERR Energy Trends June 2008

Eligible renewable sources are listed in the following table:

Sources

Eligibility

Landfill gas

Yes

Sewage gas

Yes

Hydro exceeding 20 megawatts declared net capacity (dnc)

Only stations commissioned after 1 April 2002

Hydro 20 megawatts or less dnc

Yes

Onshore wind

Yes

Offshore wind

Yes

Co-firing of biomass

Yes. (There are no restrictions on the amount of co-firing a generator can undertake. However, suppliers can only meet 10% of their obligation from co-fired ROCs.)

Other biomass

Yes

Geothermal power

Yes

Tidal and tidal stream power

Yes

Wave power

Yes

Photovoltaics

Yes

Energy crops

Yes

 

What about the eligibility of energy derived from waste?

Type of Generating station

Mixed waste

Waste that is purely biomass

Energy crops, agricultural waste and forestry material

Incineration

Ineligible

Eligible [1]

Eligible [1]

Pyrolysis, gasification and anaerobic digestion

Eligible for the biomass fraction of waste

Eligible [1]

Eligible [1]

Combined Heat and Power (CHP)

Eligible for the biomass fraction of waste produced as good quality CHP [2]

Eligible [1]

 

Eligible [1]

Co-firing

Ineligible

Eligible [1] (There are no restrictions on the amount of co-firing a generator can undertake. However, suppliers can only meet 10% of their obligation from co-fired ROCs.)

Eligible [1]

Notes:

  1. Subject to a maximum fossil-derived energy content of 10%.
  2. CHP stations must be accredited under the CHP Quality Assurance scheme to be eligible. For schemes that are fully compliant with the Good Quality benchmark, they receive ROCs on the electricity generated from the biomass fraction of the waste. For schemes that are partially compliant, this is scaled back depending on their efficiency.
  • Only stations first commissioned or re-equipped on or after 1 January 1990 (except micro-hydro and co-firing stations) are eligible.
  • All stations must be located within the UK, its territorial waters or the Continental Shelf.

Where Can I get further information on the operation of the Renewables Obligation?

The Obligation is administered by Ofgem. Further information on the Obligation is available from the Ofgem website.

Contact Ofgem:

Renewables Administrator
The Office of Gas and Electricity Markets
9 Millbank
London SW1P 3GE
E-mail: renewable@ofgem.gov.uk
Fax: 020 7901 7387

The Renewables Obligation (Scotland) and consultation documents are available from the Scottish Executive - Consultations website.

Information on Northern Ireland is available from the Department of Enterprise, Trade and Investment website.

Where can I get further information on the underlying policy?

Contact BERR:

Leah Gray
Renewables Policy & Development
Department of Energy & Climate Change
1 Victoria Street
London SW1H 0ET
E-mail: leah.gray@berr.gsi.gov.uk
Tel: 020 7215 0988

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