DECC delays announcement on Renewable Obligation review

Posted on 18 July 2012

Renewables Obligation

  • The policy requires electricity suppliers to provide an increasing share of power from renewable sources
  • Payments called Renewables Obligation Certificates (ROCs) are the main support mechanism for renewable energy projects
  • Suppliers can buy and then submit these ROCs to show that they have met their obligation

The UK government has come under fire for delaying an announcement on subsidy levels for renewable energy projects.

Ministers had been expected to reveal new support levels for projects from April next year.

But the Department of Energy and Climate Change (DECC) said it was still “discussing and finalising” details.

Labour’s shadow energy minister, Tom Greatrex, claimed investment in clean energy would grind to a halt unless ministers “end the dithering”.

Scottish Power also expressed concern, arguing that sticking to the timetable was key to investor confidence.

The DECC was due to announce the outcome of a review into renewable obligation certificate (ROC) banding, a system which obliges electricity companies to buy a certain amount of their electricity from renewable sources.

In a statement, the department said: “We will not be making an announcement today. We will bring forward the proposals in due course as we are discussing and finalising the details.

“We are committed to supporting renewables as part of our energy mix, and will continue to work hard to finalise the detail for the ROC subsidies at the earliest opportunity, but, it is important to get the levels right, and base these on evidence.”

It added: “The renewables sector is crucial for sustainable economic growth, supporting jobs up and down the country, attracting inward investment and helping us to reduce emissions in order to tackle climate change.”

Mr Greatrex claimed the decision had been delayed because of rows in government.

“Scotland’s green businesses are crying out for certainty,” he said.

“Unless ministers end the dithering and get their act together, investment in clean energy will grind to a halt and jobs and growth that could come to Britain will go overseas.”

Scottish Power’s chief corporate officer, Keith Anderson, said the company was worried by reports of the delay in announcing the outcome of the ROC banding review.

“One of the key advantages of the UK as a place to invest is the predictable nature and stability of its regulatory regime,” he said.

“Sticking to the evidence and the timetable is key to investor confidence.

“We know that maintaining support for relatively inexpensive onshore wind is likely to be the best option for customers, and we see no reason why an outcome can’t be agreed before the Olympics begin.”

James Dickson, a partner with Scottish law firm bto, said the delay would have a “significant impact on many projects”.

He added: “The lack of certainty as to available subsidies for renewables projects means that a lot of investment and funding decisions could be delayed and orders for equipment not placed.”

Britain requires heavy investment in renewable energy to meet its target of generating 15% of its energy consumption from renewable sources by 2020.

The Scottish government has set an ambitious target for the equivalent of all of Scotland’s electricity needs to come from renewables by 2020.