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Renewable Obligation Charges

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Renewable Obligation Certificate (ROC) is a certificate issued to an accredited generator for eligible renewable electricity generated and supplied to customers by a licensed electricity supplier.

It places an obligation on UK electricity suppliers to source an increasing proportion of electricity they supply to customers from renewable sources.

Where suppliers do not have the sufficient number of ROCs to meet their obligation, they must pay an equivalent amount into a ‘buy-out’ fund. The administration cost of the scheme is recovered from the fund and the rest is distributed back to suppliers in proportion to the number of ROCs they produced in respect of their individual obligation.

What Does it Mean for You?

It is assumed that suppliers pass the cost of compliance with Renewable Obligation (RO) on to consumers through their energy bills. The Department for Energy and Climate Change’s analysis estimates that the impact of the RO on average household electricity bills (including VAT) was £20 in 2011.

The below table shows the impact of RO support costs an average household, medium-sized business user and energy intensive user’s electricity bills. Figures are a percentage of the overall electricity bill (this excludes gas bills for those households on the gas grid).

2011 2012 2013
Average Household 3.4% 8.8% 1.7%
Medium-Sized Business Users 3.7% 7.4% 1.6%
Energy-Intensive Users (Consuming 100,000MWh of Electricity) 0 to 4.8% 0 to 10% 0 to 2.9%

 


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