What is the Renewable Obligation and how might it effect my organisation?
The Renewable Obligation (RO) is a mechanism designed to stimulate an increase in renewable forms of electricity generation. It requires every power generation company to produce a proportion of their electricity from renewable sources such as wind, solar or wave/tidal etc. Every megawatt of electricity generated from an applicable renewable source receives a certificate, with certificates being used to prove a generator has met their Renewable Obligation. Certificates can be traded with generation companies selling surplus certificates or buying certificates to match their obligation. Because of this renewable electricity effectively sells at a premium price which in turn is then reflected in the price paid by all consumers. Currently the RO requires generating companies to source 7.9% of their generation capacity from renewable sources. This will rise to 15% by 2015. Although individual consumers pay for the costs associated with the RO it also provides opportunities for organisation
