Consultation on addressing supplier payment default under the Renewables Obligation

The Renewables Obligation (RO) scheme in England and Wales supports the generation of renewable electricity. It operates as a market-based mechanism through a system of tradable green certificates called Renewables Obligation Certificates (ROCs). ROCs are issued to generators free of charge by the scheme administrator, Ofgem, in relation to the amount of renewable electricity they generate. Generators sell the ROCs to suppliers or traders, which gives generators a premium in addition to the wholesale price of their electricity. Electricity suppliers are under an obligation to obtain and present a certain number of ROCs to Ofgem, or instead make a fixed payment into a cash payment fund in lieu of each ROC. Cash payments are recycled back to suppliers who met their obligation with ROCs, so giving ROCs additional value. The cost of the RO to suppliers is passed on to consumers through their electricity bills. In recent years there has been an increase in the number