[Renewables Obligation Scotland]
What Is The ROS, Eligible Technologies:, ROS implementation, Benefits, Cost to consumers
- Part of the Government’s revised Policy for Renewable Energy in the UK (Utilities Act 2000[1])
- One of the measures the UK Climate Change Programme proposes that will deliver the Country’s legally binding target from Kyoto to cut greenhouse gas emissions
- It’s purpose is to encourage the uptake of renewable power generation sources by the electricity industry through the development of the market for electricity from renewables
- Power suppliers are required to derive from renewables 10% of the electricity they supply to consumers by 2010 (The cost to consumers will be limited by a price cap)
- The Renewables Obligation Scotland succeeds the Non-Fossil Fuel Obligation (NFFO[2]) (SRO in Scotland) which was part of the 1989 Electricity Act, to help establish an institutional framework that would ensure that renewables could compete in the UK’s open market). [3] This was achieved by specifying amounts of new generating capacity from non fossil fuel sources including renewables. The total amount of electricity production was secured through contracts with renewables generators at premium rates
Distinguished between technologies
- Different premiums
- Different levels of generating capacity
- Electricity prices supported under consecutive renewables obligations orders were required to converge with electricity prices from conventional generation
- To assist the UK to meet national and international targets for the reduction of emissions, including greenhouse gases
- To help provide secure, diverse, sustainable and competitive energy supplies
- To stimulate the development of new technologies necessary to provide the basis for continuing growth of the contribution from renewables into the longer term
- To assist the UK renewables industry to become competitive in home and export markets and in doing so to provide employment and
- To make a contribution to rural development
- In 1999 2.8% of the total generated electricity was from renewable sources
- The NFFO is expected to contribute by raising this percentage to 5%
- By 2010 the Government expects that 10% of electricity sales would be made up from renewables
- The overall target will be accomplished by gradually increasing the amount of electricity from renewables sold from year to year:
Table 1: Level of Obligation[4]
|
Period |
Estimated sales by licensed suppliers in GB |
Total obligation (GB) |
Total obligation as % of sales (GB) |
|
|
TWh |
TWh |
% |
|
2001/2002 |
310.9 |
|
|
|
2002/2003 |
313.6 |
9.4 |
3.0 |
|
2003/2004 |
316.2 |
13.5 |
4.3 |
|
2004/2005 |
318.7 |
15.6 |
4.9 |
|
2005/2006 |
320.6 |
17.7 |
5.5 |
|
2006/2007 |
321.4 |
21.5 |
6.7 |
|
2007/2008 |
322.2 |
25.4 |
7.9 |
|
2008/2009/ |
323.0 |
29.4 |
9.1 |
|
2009/2010 |
323.8 |
31.5 |
9.7 |
|
2010/2011 |
324.3 |
33.6 |
10.4 |
|
2011/2012 to 2026/2027 |
|
|
10.4 |
· Energy from waste:
· Landfill gas
· Sewage gas
· Onshore wind
· Offshore wind
· Geothermal
· Tidal and tidal stream power
· Wave power
· Hydro exceeding 20MW
(Only stations commissioned after the date the Order is made)
· Hydro 20MW or less declared net capacity (DNC[5])
· Photovoltaics
· Energy Crops
Table 2: Eligibility of Energy from Waste and biomass[6]
|
|
Mixed wastes |
Waste which is purely biomass |
Energy crops, agricultural waste and forestry material |
|
Incineration |
|
|
|
|
Pyrolysis, gasification, anaerobic digestion |
Only Non Fossil Fuel derived |
|
|
|
Co-firing |
|
Until 31st March 2011 |
Until 31st March 2011 |
OFGEM will be responsible for monitoring and ensuring compliance through:
ROCs will be presented in respect to year-long periods
Suppliers can comply by:
A buyout price can be paid as an alternative to supplying renewable energy, set at 3.0 p/kWh
This scheme allows generators that haven’t the facilities or policies in place to accommodate for generation from renewables to ‘buyout’ their obligation from OFGEM.
This does not mean that the generators are not obligated to produce energy from renewables but it is a way for meeting their obligations until generation from renewables is possible.
Buyout receipts will be recycled to
To what extent these achievements will be fulfilled are unknown but in the past The Obligations have not proved as successful as first hoped.
By 2010/2011 there will be an estimated overall increase to the price of electricity for consumers of about 4.4% compared to prices in 1999; these estimated take into account:
- 10.4% of sales by licensed electricity suppliers is from eligible renewables,
- Receipts from suppliers are recycled in proportion to the amount of eligible renewables,
- That this does not increase the maximum potential cost to the consumers and
- That unlicensed suppliers do not increase their prices (if they do the increase cost rises to 4.9%)
- Alleviating factors include:
- The general environmental benefits
- The additional jobs generated from the operation of any new generating plants
The ROS will have consequences on suppliers of electricity, i.e. costs will increase due to;
· Time spent on planning and preparing for the ROS
· Changes to existing administrative and computer accounting systems
· Training of staff
· Legal costs for drawing up generator – supplier contracts
· Any printing and stationary costs
· Recurrent costs of complying with the ROS
o Providing the evidence OFGEM requires
o Maintaining records and accounting systems to enable the ROS to be complied with
o Purchasing ROCs
Alleviating factors include:
- Added value to the companies
- Risk of energy shortage reduced
- Company image is protected
- Protection and further development of the energy market
- Opens new Green Certificate market prospective
- Creates an internationally competitive market
Home, Beginners Guides, Policy
[4] New and renewable Energy prospects for the 21st Century The Renewables Obligation Statutory Consultation , DTI (Department of Trade and Industry) p23
[5] the highest generation of electricity which can be maintained indefinitely without causing damage to the plant, less so much of that capacity as is consumed by the plant
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