The UK Government has opened a Call for Evidence on introducing Fixed Price Certificates (FPC) into Renewables Obligation (RO) schemes.
Although new RO applications have now closed, stations that were accredited will still receive support from the scheme between 2027 and the final closure of the scheme on 31 March 2037.
The scheme puts three separate complimentary obligations over England and Wales, Scotland, and Northern Ireland on electricity suppliers to present a certain number of RO Certificates (ROCs) to Ofgem in respect of each MWh of electricity they have supplied to their customers during an obligation year.
This Call for Evidence concerns the proposed transition to a FPC model in 2027 to issue cost and revenue certainty to stakeholders in the latter part of the scheme. This is because price volatility is expected to emerge as a result of generating stations retiring from the scheme.
The Call seeks views on:
- potential FPC models featuring a central payment and settlement counterparty
- frequency and sequencing of FPC issuing, obligation setting, and settlement
- pricing arrangements
- when FPCs should be introduced
Consultation will close at 11:59pm on 9 October 2023.
The RO scheme met with some controversy when Ofgem confirmed that its mutualisation had been triggered for a fourth year in December 2021, with supplier exits leaving a shortfall of £218 million.
This followed the energy regulator issuing two energy suppliers with final order and five more with provisional orders the month before over a total of £17.9 million of outstanding RO payments.