Renewables Obligation (RO) meaning

In this issue: Electricity and gas market regulation and licensing Networks and network connections Renewable energy Energy disputes Air emissions, efficiency, and climate change International energy Daily and weekly news alerts New and updated content Dates for your diary Trackers Electricity and gas market regulation and licensing Electricity Code Modifications Information on all ongoing changes to the Connection and Use of System Code (CUSC), the Grid Code (GC), the System Owner -Transmission Owner Code (STC) and the Security and Quality Supply Standard (SQSS) is now brought together on NESO’s Modification Tracker. The tracker clarifies each modification’s intent, the stakeholders impacted, Panel views on prioritisation, and its current point in the review journey. For more information, see: Codes. Networks and network connections Ofgem launches consultation on TMO4+ connections reform package Ofgem has outlined its ‘minded to’ positions on the National Energy System Operator (NESO)’s TMO4+ grid connections reform package. These indicative...

In this issue: Key developments and materials Electricity and gas market regulation and licensing Networks and network connections Renewable energy Capacity Market, balancing services and energy system flexibility Air emissions, efficiency, and climate change International energy LexTalk®Energy: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Key developments and materials Built environment industry responses to the Spring Statement 2025 Following the Spring Statement on 26 March 2025, a range of built environment bodies shared their reactions. RenewableUK welcomed the decision to remove Climate Change Levy costs from electricity used to produce green hydrogen. See: LNB News 27/03/2025 54. Electricity and gas market regulation and licensing Electricity Code Modifications All current changes to the Connection and Use of System Code (CUSC), the Grid Code (GC), the System Owner -Transmission Owner Code (STC) and the Security and Quality Supply Standard (SQSS) are...

In this issue: Electricity and gas market regulation, licensing and taxation Networks and network connections Renewable energy Capacity Market, balancing services and energy system flexibility Nuclear energy Air emissions, efficiency, and climate change International energy New and updated content Dates for your diary Trackers Energy resources on Lexis+® Daily and weekly news alerts Electricity and gas market regulation, licensing and taxation DESNZ publishes guidance on domestic energy tariff reductions DESNZ has released guidance for domestic energy suppliers on delivering mandatory tariff reductions from 1 April 2026, reflecting the government’s 2025 Autumn Budget promise to cut typical household energy costs by around £150. The document outlines how suppliers must apply bill discounts to domestic electricity and gas as a result of two policies: the Renewables Obligation to Exchequer scheme, which removes 75% of domestic RO costs from electricity bills and replaces them with Exchequer support, and the closure of ECO4 and the...

ARCHIVED: This Practice Note has been archived and is not maintained. How are contracts for difference (CfD) and the renewables obligation (RO) connected? The renewables obligation (RO) is designed to stimulate investment in renewable generation. It achieves this by placing a duty on customer-facing electricity suppliers—who obtain electricity from generators, whether directly or indirectly—to procure an ever-increasing share of their wholesale supply from renewable sources. The Secretary of State (SoS) for Business, Energy and Industrial Strategy (BEIS) determines the proportion required each period. Suppliers prove compliance by submitting renewable obligation certificates (ROCs) to the Office of Gas and Electricity Markets (Ofgem). New ROCs are issued solely to accredited renewable generators, encouraging suppliers to purchase renewable output (together with separately priced ROCs) from such projects, thereby delivering a degree of financial support to those developments. For further details, see Practice Note: Renewables Obligation (RO)—accreditation of renewable electricity generators [Archived]. On 31 March 2017, the RO closed to most categories of new generation. The RO will continue to...

ARCHIVED: This Practice Note has been archived and is no longer maintained. Background When the Energy Act 2013 (EA 2013) took effect, and to some extent still today, the UK was grappling with significant issues across its electricity system. These encompassed: developing low-carbon generation capacity to hit net zero carbon goals (as prescribed under the Climate Change Act 2008, as amended by the Climate Change Act 2008 (2050 Target Amendment) Order 2019, SI 2019/1056) replacing power plants approaching the end of their operational lives modernising grid infrastructure to cope with a higher share of intermittent and inflexible generation (for example wind and nuclear respectively, in contrast to conventional and responsive sources such as coal-fired turbines) and a growing population delivering gains in energy efficiency, notably within older, inefficient building stock, to help restrain energy demand Total investment in power infrastructure was estimated at £110bn by 2020. To achieve these objectives, particularly on the supply side of the market, the...

For a fuller analysis of the regulation, consenting and incentivisation of the net zero energy transition under the laws of England and Wales, see also: Collinson and Hockman on Energy Law: Regulating, Consenting and Incentivising the Energy Transition. That textbook offers comprehensive treatment of the topics addressed in this Practice Note, with in‑depth discussion of the same issues. What is the background to the CfD regime? Contracts for Difference sit at the heart of the government’s Electricity Market Reform (EMR) programme, introduced in 2013. EMR was devised by the UK government to encourage investment in secure capacity and affordable, low‑carbon electricity generation. The principal mechanisms enacted through the EMR reforms include: the Contracts for Difference (CfD) regime, the focus of this Practice Note, structured as a contract that grants owners of new build low‑carbon generation projects a long‑term, stable revenue stream in respect of the electricity they generate while their plant is in operation the Capacity Market (CM) regime, which provides a regular...