Content © Stopwoodlanewindfarm 2008 - 2011
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Review of ROC Subsidy levels for renewable energy. |
Wind turbines are as well as, not instead of the power stations
The outcome - The review concluded that onshore wind should receive slightly less subsidy at 0.9 ROC per MWHour.
That biomass co-firing should continue to receive 0.5.
That dedicated biomass, as has just been approved for Drax should receive 1.5
And that offshore wind should receive 2, reducing to 1.9 in 2015 and 1.8 in 2016.
The changes are not likely to have a significant impact.
Introduction The ROC - Renewable Obligation Certificate system is one of two systems of taxation that the Government is using to drive its climate change strategy.
The ROC system could be described as the a carrot system because ROC’s are given free of charge to companies that generate power from selected renewable sources.
A ROC – which must be surrendered by electricity suppliers to meet a growing percentage of their power sales – is worth around £38 ($61), while electricity is currently trading around £50-55/MWh.
The number of ROC’s donated varies according to the method of generation - offshore wind was being given 2 per unit generated while onshore was only receiving one. Biomass co-firing was receiving 0.5.
The net effect is to increase electricity prices and ultimately the consumer pays.
The purpose of the review was to ensure that the level of ROC was enough to encourage investors to build more renewable energy generation facilities.
The detail -
Financial commentary on the review see http://www.environmental-finance.com/news/view/2076
The schedule of ROC allowances as set out by the Government see http://www.decc.gov.uk/en/content/cms/news/pn11_85/pn11_85.aspx
To see the full report and the consultation document see http://www.decc.gov.uk/en/content/cms/consultations/cons_ro_review/cons_ro_review.aspx
Parliamentary debate -
The price of power is a major political issue and the ROC is a significant part of the recent increases and will continue to increase further as more of the power generated comes from renewable sources, all of which benefit their owners by receipt of payment for the ROC as well as for the power. Offshore power which receives 2 ROCs per unit can be up to three times the average market price for electricity.