The Renewables Obligation 2009: a new order

The 2009 vintage of the Renewables Obligation (RO) for England & Wales, Scotland and Northern Ireland became law last week. Even by the standards of the RO – which has been revised more or less annually since its inception – the latest legislation represents a new era for the RO and therefore for renewable electricity generation in the United Kingdom.

The biggest ideological change by far has been the introduction of "banding". The RO is no longer technology neutral. Instead, each technology is assigned to a particular band, and each band enjoys a particular level of support. Previously all technologies were eligible for one renewables obligation certificate (or ROC) per megawatt hour of electricity generated. Now some technologies are eligible for more than one ROC, while others are eligible for less.

However, the introduction of banding is by no means the only change of significance.

This note starts with a brief refresher on the basics of the RO, before going on to explore some of the more significant changes introduced by the 2009 Orders, including:

• banding generally (including grandfathering);
• banding for waste and biomass (including the advanced conversion technologies, co-firing and combined heat and power);
• measuring the renewable energy content of fuel (particularly for municipal waste);
• reports on the origin of biomass (sustainability reporting);
• calculating the level of the RO;
• the cap on the proportion of a supplier's RO that can be met with co-fired ROCs;
• broadening the concept of "permitted ways" (private wires); and
• the deduction of Ofgem's costs from the buy-out funds.

Much of the complexity and change arises in respect of biomass and waste – those developing onshore wind will hardly notice that anything has changed!

For a look into the long history of changes to the RO, highlights from Wragge & Co's archive are also available.