Promise of no fundamental change to Renewables Obligation

The 2005 review of the Renewables Obligation (RO) framework will not look for fundamental changes to the UK's main renewables support mechanism, promises the government. Its pledge comes after a consultation revealed that most parties favour narrow terms of reference for the review to avoid undermining confidence in the RO. The RO requires all electricity suppliers to source a rising proportion of their power from renewable energy sources. The level of the RO began at 3% in 2002. It now stands at 4.9% for 2004/05 and will increase to 15.4% by 2015/16. The Department of Trade and Industry says the review will look at improving the effectiveness of the RO, while avoiding changes to its basic operating principles. Areas to be examined include the effectiveness of the obligation in stimulating renewables, the level of the obligation after 2015/16, its working arrangements, price convergence of renewable energy technologies towards the market price of electricity, and the impact on the market of the EU Emissions Trading Scheme. The government anticipates introducing any changes to the RO as a result of the review from April 2006. Energy minister Mike O'Brien says: "Confidence in the RO framework over the long term is important to us. Wherever we consider possible changes to the obligation during the review, maintaining that confidence will be a key consideration."