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12 March 2004 - UK energy regulator Ofgem yesterday set the buy-out price for the third year of the Renewables Obligation at a marginally increased rate of £31.39 ($56.5) per MWh.
The buy-out price allows electricity suppliers to make up any shortfall between the amount of their obligation and the number of Renewables Obligation Certificates (ROCs) presented.
The buy-out price is adjusted each year to reflect changes in the retail prices index. The Government set the buy-out price at £30/MWh for the first year of the Renewables Obligation. For the second year of the scheme the buy-out price was set at £30.51/MWh.
Earlier this month Ofgem published its first Renewables Obligation Annual Report, which showed that seven suppliers had not either produced sufficient renewable energy certificates
or met buy-out obligations.
The Annual Report highlighted that out of 38 supply companies in England and Wales who had an obligation, 12 met their obligation wholly through producing ROCs, and 9 suppliers paid 100 per cent buy-out. In Scotland, 28 suppliers had an obligation of whom16 met their obligation wholly through producing ROCs, with 4 suppliers paying 100 per cent buy-out.
Seven suppliers failed to produce the required number of ROCs or make the full alternative payment to the buy-out fund prior to the 1 October deadline. Five of the companies have agreed to make voluntary payments to suppliers who had correctly produced ROCs. Ofgem is currently considering whether further enforcement action will be taken against the remaining two companies.
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