Statistics for first year of renewables obligation

Energy regulator Ofgem has released statistics for the first year of the renewables obligation from April 2002 to March 2003.1

Some 5,562,669 renewables obligation certificates were issued, but only 5,451,449 were surrendered to Ofgem by the 1 October deadline. This indicates that roughly 2% of ROCs have been banked for use against the following year's obligation - when ROC prices were widely expected to be higher than during the first year (ENDS Report 330, p 33 ).

However, the picture is blurred by several suppliers either making late payments or incorrectly trying to meet more than a quarter of their obligation using ROCs from co-fired biomass. Overall, 8% of issued ROCs came from this source.

The report confirms one perverse effect of the obligation. Ten hydro stations down-rated their electrical capacity to below 20MW before 1 April 2002 so that they could become eligible for ROCs. This resulted in a total capacity reduction of over 59MW (ENDS Report 343, pp 10-11 ). Scottish and Southern Energy owns seven of these stations, with the others belonging to Innogy and Alcan.

Out of 38 suppliers who had an obligation for customers in England and Wales, nine met all of their obligation through producing ROCs and another relied solely on paying the buyout price. Of the 28 suppliers with an obligation in Scotland, 16 met their obligation entirely through ROCs and four wholly through the buyout.

The report does not reveal what proportion of suppliers' obligations were met from renewables generated in-house.

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