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Shortfall in green power
1 April 2009
Despite a steady rise in renewable generation in the UK, the gap is widening between the amount of green power produced and the legal requirement on electricity retailers to increase the volume of renewables in their sales, finds energy regulator Ofgem in its renewables obligation (RO) annual report for 2007-08. This scarcity of renewables capacity boosted the average value of a renewables obligation certificate (ROC), representing one megawatt-hour of electricity generation, to a record £52.95 -- up from £42.54 two years ago. The RO requires retailers to procure 15.4% of their electricity from renewables by 2015-16. In 2007-08, the RO stood at 7.9%. Retailers demonstrate their compliance by buying ROCs. For any shortfall, they pay a penalty to "buy out" of their obligation. The average percentage by which retailers met the RO in 2007-8 fell to 64% from around 68% the previous year. Only four small companies out of the total 30 electricity retailers met 100% of their obligations through ROCs: Good Energy, Renewable Energy Company, owner of Ecotricity, Slough Energy Supplies and Tradelink Solutions. Most others -- including the six major retailers -- resorted to a combination of ROCs and paying the buy out price. Nine opted simply to pay the buy out penalty. Of all the renewable technologies, onshore wind accounted for the biggest share of renewables generation -- 36% of ROCs, 30% from onshore wind and 6% from offshore. Eight retailers met their separate Scottish obligations by buying 100% ROCs, including one of the big six, Iberdrola subsidiary ScottishPower. In Northern Ireland, only Scottish & Southern Energy's renewables subsidiary Airtricity met its obligation entirely through ROCs.
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