09-09-04

New moves to encourage further investment in renewable energy were outlined by UK Energy Minister Stephen Timms.

The proposals -- published in the consultation document "Renewables Obligation Order 2005" -- will strengthen the development of electricity generation capacity using renewable energy sources in the UK.

The main measures outlined are to:
-- Extend the level of the Renewables Obligation beyond 2010/11 to 2015/16;
-- Allow tradability between Northern Ireland Renewables Obligation Certificates (NIROCs) and GB ROCs;
-- Introduce measures that will further secure the buy-out fund in the event of a shortfall occurring;
-- Consider the introduction of a single recycling mechanism for the separate buy-out funds;
-- Introduce more flexibility for small generators.

The Renewables Obligation, which began in 2002, sets out targets for energy suppliers to source an increasing amount of their energy from renewable resources. Certificates, or ROCs, are awarded to suppliers using renewable sources, allowing them to demonstrate their compliance with the targets. ROCs can be traded between suppliers to make up any shortfall. The new measures will secure the Obligation and further improve its operation.

Stephen Timms, Energy Minister, said: "The Renewables Obligation is a long-term policy commitment and will help maintain investor confidence in the industry, which is central to achieving our target of 10 % of renewable energy generation by 2010."

The Northern Ireland Renewables Obligation is expected to be introduced from 1 April 2005 and the Energy Act 2004 provides for the full recognition and tradability of certificates there with those issued in Great Britain.

Commenting on the proposals that give effect to new powers acquired through the Energy Act 2004 Stephen Timms added: "To reduce the impact of any further shortfalls we took a new mutualisation power in the Energy Act 2004. This allows us, in the event of a shortfall in the buy-out fund, to require suppliers to make payments to Ofgem in order to recover that shortfall.”

"Both these measures, along with the other proposals, including the extension of the Obligation to 2015 which I announced last year, will help to secure the Obligation further, and increase confidence in the renewables market."

Source: Power Engineering