Ofgem reveals renewables obligation for 2019/20

Ofgem issued more than 130 million renewables obligation certificates (ROCs) in the 2019/20 year.

The renewables obligation requires licenced electricity suppliers to source a proportion of the electricity they supply to customers from renewable sources. Ofgem sets suppliers’ obligations as a number of ROCs.

The obligation levels for the 2019/20 year were announced by the Department for Business, Energy and Industrial Strategy (BEIS) in 2018 and are:

• 0.484 ROCs per MWh of electricity supplied to customers in England, Wales and Scotland
• 0.19 ROCs per MWh of electricity supplied to customers in Northern Ireland

In total, the obligation for the period is 130,183,968 ROCs, split between:

• 116,940,506 in England and Wales
• 11,782,299 in Scotland
• 1,461,163 in Northern Ireland

Suppliers have until 1 September to meet their obligations for 2019/20 (31 August for buy-out payments) by:

• Presenting ROCs to Ofgem
• Making a buy-out payment of £48.78 per ROC
• Using a combination of ROCs and a buy-out payment

Those who do not meet their obligations in full next week will need to make a late payment by 31 October.

Last year Ofgem revealed that almost £100 million in RO payments were left owed by energy suppliers, many of which had left the market, resulting in mutualisation being triggered for the second time in as many years.

Mutualisation has been a major source of contention in the past two years, with compliant suppliers required to pay out millions of unpaid RO payments.

In order to mitigate its effects, a financial responsibility principle is being introduced requiring all suppliers to take actions to minimise the likelihood and extent of costs to be mutualised in the event of their failure.