Renewable Obligation Certificates
Renewable Obligation Certificates
Generate renewable source electricity and get paid twice with ROCs
general | energy efficiency | wind | solarRenewable Obligation Certificates (or
ROCs) store details of how electricity was generated, who generated it, and who eventually used it. Since April 2002 all UK licensed electricity suppliers have been obliged to obtain a proportion of the electricity they sell from a selection of
eligible renewable sources such as
wind and
solar power.
For every 1,000 units (1MWh) of
green electricity an energy company generates they receive one
ROC. A company that generates more than its
renewable obligation can sell ROCs to energy suppliers who have failed to meet their
RE obligation. In this way power companies are financially motivated to invest in
renewable energy generation projects.
The price of one ROC is set by the market and reflects the size of the difference between the percentage of
RE electricity generated in the UK (currently around 6%) and the renewable obligation percentage (currently 6.7%). The bigger the shortfall, the more expensive each ROC and the more green electricity generators are rewarded for their efforts and fossil fuel burners are punished.
Currenly ROCs are selling at around £40 each, however prices could fall as more and more
wind turbine generators and major
offshore windfarms come online in the UK.
Every year the
renewable obligation level increases - it started in 2002/3 at 3%, and will reach 10% by 2010, and 15.4% in 2015/16. The goal is to reach 20% by 2020.
Obtaining ROCs as a Domestic RE Generator
ROCs are not restricted to the major utility companies. Anyone who is generating renewable source electricity can apply to
ofgem to be registered as a
Small Scale RE Generator (<50kW). If you generate sufficient RE electricity from your
solar panels and/or
wind turbines you will receive
renewable obligation certificiates which you can sell on the open market. In this way, you obtain free electricity from your RE source AND you effectively get paid for it!
If you have a
grid-tied system then you would be paid by your energy supplier for every unit of electricity you
spill into the grid AND you will get ROCs for every unit you generate whether you used it or sold it. An extra meter must be fitted to your renewable system and you simply declare each year how many units you have generated from your renewable source and your digital ROCs are added to your account.
You can sell your ROCs through a broker for a fee. Obviously the fewer ROCs you have, the higher the per ROC fee will be.
e-ROC, for example, have a quarterly online auction of
renewable obligation certificates charging just 50p+VAT per ROC sold with a minimum charge of £50+VAT.
ofgem buy ROC's at an inflation linked price - currently around £32 - so at worst you can expect to make approximately 3p/kWh for each unit you generate as long as you generate more than 500 kWh per year.
nb. 500 kWh is approximately the annual output you can expect from around 200 Watts of PV solar panels in the UK, or a D400 Generator in a good windy location.
Article Last Modified: 11:37, 15th Apr 2008Comment on this Article
If you have any comments on this article, please email them to
neil@reuk.co.uk.
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