Renewables Obligation: 2010 changes

The Renewables Obligation underwent a major overhaul last year, particularly with the introduction of 'banding'.

The Government is currently considering further changes to the Renewables Obligation, including a possible mechanism to reduce or remove the risk of fluctuations in the wholesale price of power (which sounds like a very complicated feed-in tariff).

In the meantime, a number of changes will be made with effect from 1 April 2010. Some of these changes are significant, but most have been expected, and so have caused little comment. In summary, these are:

• increasing the level of headroom used to calculate the level of the obligation from 8% to 10%, and removing the 20% cap that previously applied as the maximum level that the obligation could reach;
• extending the life of the Renewables Obligation from 31 March 2027 to 31 March 2037;
• introducing a 20-year limit on the period for which each project is eligible for support under the Renewables Obligation - albeit that projects accredited before 25 June 2008 will be eligible until 31 March 2027;
• excluding microgeneration from the Renewables Obligation, on the basis that microgeneration will in the future be supported under the Feed-In Tariff;
• clarifying that ROCs cannot be revoked once they have been presented to Ofgem by a supplier (but that Ofgem can withhold a future ROC that would otherwise have been issued to the same generating station); and
• providing increased support to offshore wind turbines installed between 1 April 2010 and 31 March 2014.