UK Government

UK Government: O'Brien finalises proposals for review of renewables obligation

Nov 04, 2004 M2 PRESSWIRE

Energy Minister, Mike O'Brien, today published the Government's plans for the review of the Renewables Obligation (RO). The Renewables Obligation ensures all electricity suppliers produce a specified and increasing amount of energy from renewable sources.

Following the publication of the draft terms of reference in August 2004, the Department of Trade and Industry received over 90 comments from key stakeholders. There was strong support for the proposal of a limited review to improve the effectiveness of the RO, whilst avoiding changes to the key operating principles. The final terms of reference, published today, reflect that and confirm the scope of the review proposed in August.

Energy Minister, Mike O'Brien said:

"After two years in existence, this is a good chance to assess the impact of the Renewable Obligation and how we can refine it to provide the best environment for producing renewable electricity. Confidence in the RO framework over the long-term is important to us. Wherever we consider possible changes to the Obligation during the review, maintaining that confidence will be a key consideration."

Among the key areas that the review proposes to examine are:

* the effectiveness of the RO since it began in April 2002;

* all aspects of the working arrangements of the RO;

* the levels of the RO beyond 2015/16;

* the potential impact of the EU Emissions Trading Scheme on carbon; andprices and the future cost competitiveness of renewable technologies;

* energy from mixed wastes.

The level of the RO was 3% when it was introduced and now stands at 4.9% for 2004/5, and will increase each year to reach 10.4% in 2010/11. Secondary legislation will shortly be introduced increasing that figure to 15.4% by 2015/16.

Notes to Editors

1. The Government's detailed proposals on the terms of reference for the 2005-6 Renewables Obligation Review can be found at: http://www.dti.gov.uk/energy/renewables/policy/terms_of_reference.shtm l

2. Renewables Obligation (RO) Introduced in April 2002, the RO requires all licensed electricity suppliers in England & Wales to supply a specified and growing proportion of their electricity sales from a choice of eligible renewable sources. Individual suppliers are responsible for demonstrating their compliance to the energy regulator Ofgem, through a system of Renewables Obligation Certificates (ROCs). The RO is the key policy mechanism by which the Government is encouraging the growth necessary to reach the UK's renewable energy target of 10% of electricity from renewable sources by 2010.

3. The Renewables Obligation Review is an Energy White paper commitment. The Energy White Paper was published in 2003.

4. An initial Consultation document on the review of the Renewables Obligation itself will be published in early 2005.

CONTACT: Department of Trade and Industry Tel: +44 (0)20 7215 5000 Textphone: +44 (0)20 7215 6740 (for those with hearing impairment) WWW: http://www.dti.gov.uk

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