UK government proposes review of Renewables Obligation

5 November 2004 – UK Energy Minister, Mike O’Brien, published Thursday 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, all aspects of working arrangements, possible levels of RO beyond 2015/16, the potential impact of the EU Emissions Trading Scheme and energy from mixed wastes.

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

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