Renewable obligations certificates, contracts for difference and exclusion clauses
By Joseph Hale
Many renewable energy projects rely on a subsidy from the UK government through the renewable obligations certificates (ROCs). Different types of power generation technologies qualify for different ROC ‘branding’. The value of the subsidy for a project (once operational) more often than not makes the difference between a project being viable or unviable. ROCs will be closed to all new power generation in 2017.
The Energy Bill will introduce contracts for difference (CfDs) to replace ROCs. CfDs are long-term contracts to provide incentives for power producers to generate election of using low-carbon resources makes. CfDs are likely to be introduced from 2014. Between 2014 and 2017, developers will be offered a one-off choice between opting for ROCs or CfDs for their low-carbon project. The CfDs will guarantee a developer a strike price for the power generated by a project to insulate the developer (to an extent) from changes in the open market price…
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