What is the Renewable Obligation?
The Renewable Obligation is designed to help promote and incentivise the production of renewable energy in the UK. The scheme is administered by Ofgem, the Gas and Electricity Markets Authority.
The Renewable Obligation Order 2002 ("the Order") came into effect on 1 April 2002. The Order places an obligation on licensed electricity suppliers to source a percentage of electricity from renewable sources. Sources of generation could range from large off shore wind farms to small PV units on a domestic house. Suppliers have to meet this obligation by presenting Renewable Obligation Certificates (ROCs). Suppliers must produce enough ROCs to prove that they have bought enough electricity from renewable sources to cover their obligation. If suppliers do not have enough ROCs at the end of the obligation period to meet their obligation, they must pay an equivalent amount into a fund, the proceeds of which are paid back on a pro-rated basis to those suppliers who have presented ROCs. For more information about the npower scheme click here
Why should I apply for ROC's?
If you have a electricity microgeneration system installed at your home, you are entitled to apply for Renewable Obligation Certificates (as long as your system has been accredited by Ofgem). The Order has now made it easier for domestic scale microgenerators to apply for Renewable Obligation Certificates (ROC)s, by allowing agents to act on their behalf. npower will act as your agent and complete all the necessary paperwork for you. When you appoint us as your agent ( a requirement of the scheme) we will also purchase from you any ROCs you receive.
What is Ofgem’s role?
Ofgem administer the ROC scheme. Their main function is to:
- Provide accreditation to generating stations to prove that they are an eligible renewable source
- Issue ROCs
- Establish and maintain a register of ROCs
- Monitor compliance with the Order and other relevant legislation
- Publish an annual report on the operation of the scheme
- Ofgem must comply with the Order and all other legislation and cannot act beyond its scope.
What will npower do as my agent?
The Order allows agents to act on behalf of microgenerators. This means that npower can now act as an agent for all our microgeneration customers and help you gain extra financial benefit.
If you join our Microgeneration Scheme you will need to appoint us as an agent on your behalf, npower will apply to Ofgem to have your microgeneration unit accredited under the Renewables Obligation Order. This is a statutory requirement to prove that your generator produces renewable electricity and complies with all the regulations under the Order. Once we have accredited your unit any generated electricity produced by your microgeneration unit will become eligible for ROCs.
The Renewable Obligation period set by the Order runs from April 1st to March 31st of each year. All generated electricity in this period will be eligible to claim ROCs. We will ask you to provide us with a meter reading from your generation meter on April 1st to show how much electricity you have generated during the [previous] obligation period.
Once npower has received your meter readings, we will submit them to Ofgem, who will issue us with the relevant amount of ROCs. Once we have received the ROCs from Ofgem, we will reward you with a ROC payment.
Am I eligible?
If you have Micro Wind, Photovoltaic, Biomass or Hydro- electric technologies installed, you are eligible to receive ROCs, so long has you have been granted accreditation by Ofgem:
We will be asking you some questions that are required by Ofgem in order to complete your accreditation application. Failure to provide this information on request will result in Ofgem being unable to grant accreditation to your microgeneration unit. Therefore it is important that you answer all questions fully and correctly. We will be happy to help if you have any further questions.
We will be claiming ROCs for you under Article 10 of the Order. Article 10 refers to electricity that is generated on site and used within the home for personal use. This means that all electricity you generate will be eligible.
What do I have to do? All you have to do is appoint npower as your agent to collect ROCs on your behalf.
We will use the information provided by you to complete the accreditation questionnaire on your behalf. Please note that we may need to contact you to obtain further information. If you do not provide us with the required information, we will be unable to complete your accreditation and you not be eligible to receive ROCs.
The next stage will be to collect a meter reading from your generation meter in April and submit this reading to Ofgem. Once we have received your ROCs, we will notify you and make a payment to you in the form of a personal cheque.
How many ROCs will I receive?
If you generate more than 1MWh (i.e. the amount of energy used in an average house for 14 weeks) of renewable energy, you are eligible to receive Renewable Obligation Certificates (if you system has been accredited by OFGEM ); One ROC being issued for every MWh of energy you produce. On average a 2kWp photovoltaic system will produce 2 ROCs during an obligation period.
How much will get paid for my ROCs?
For the obligation period 1st April 2007 to 31st March 2008, we will pay you £34.30 for every ROC you produce. This is based on the buy-out price issued by Ofgem, please visit www.ofgem.gov.uk. We reserve the right to charge an administration fee. This fee will not exceed £5.
New legislation that came in to force in April 07 allows customers to appoint an agent. npower is happy to offer customers on the microgeneration scheme this service. As an agent, we will accredit your microgeneration unit with Ofgem with the information you have supplied us and pay you a price equivalent to the Ofgem Buy-Out price, which for this obligation period is £34.30 / MWh*. Essentially this means that for every MWh of electricity that you generate as an npower customer, we will pay you an additional £34.30 to the money we pay you for the excess electricity you sell to us.
*The price quoted above of £ 34.30 is the market buy-out priced determined for the period 1st April 2007 – 31st March 2008 . The buy-out price is a fixed price per MWh shortfall and is adjusted in line with the Retail Prices Index each year. npower can only purchase ROCs from current microgeneration tariff customers. Current legislation states that customers engage in a ‘sell & buy-back’ agreement with their energy suppliers.
When will I get paid?
All ROCs will be issued into an account on the ROC register, administered by Ofgem. This account will be set up by npower. We will monitor how many ROCs you microgeneration unit has received and make payments accordingly. We will endeavour to have all payments sent to you by October each year , subject to receipt of the ROCs from Ofgem.
What if I wish to leave npower?
The Order states that only one agent can be used per each Renewable Obligation period (1st April to 31st March). Therefore when you appoint us as your agent, we must continue to act on your behalf until at least 31st March, for the purposes of collecting ROCs on your behalf. You may leave npower and the Microgeneration Scheme at any point in accordance with our Terms and Conditions, however we must still act as your agent until the end of the Renewable Obligation period. If you do wish to leave npower and the Microgeneration Scheme, please send written notification within the 28 day notice period as set out in our Terms and Conditions to: Sue Warman Npower 1 Bridgwater Road Worcester WR4 9FP.
We will inform Ofgem that we will no longer act as agent on your behalf. However, this termination will not take place until 31st March and we shall continue to act as your agent until this time. We will write to you to ask for your meter readings and make any payments owed to you on receipt of ROCs allocated to your microgeneration system.
Where do I go for further information? If you require further information on the Renewables Obligation, please visit www.ofgem.gov.uk. Alternatively, contact our Microgeneration Scheme specialists on 01905 340646*.
* Lines may be recorded and monitored for security and training purposes.
