The Renewables Obligation Order 2006 (Amendment) Order 2007

EXPLANATORY NOTE

(This note is not part of the Order)

This Order amends the Renewables Obligation Order 2006 (“the 2006 Order”).

By virtue of the amendments made to the 2006 Order by this Order, an electricity supplier in England or Wales may now discharge its renewables obligation (within the meaning of the 2006 Order) by producing certificates (known as renewables obligation certificates or ROCs) which certify the matters within section 32B(2ZA), (2AA), (2AB) or (2AC) of the Electricity Act 1989. (Subsections (2ZA), (2AA), (2AB) and (2AC) were inserted into section 32B of the Electricity Act 1989 by the Climate Change and Sustainable Energy Act 2006.)

In relation to ROCs certifying the matters within section 32B(2ZA) or (2AA), this change is achieved by amending articles 3(2) and 13(1) of the 2006 Order: see articles 4(3) and 9 of this Order. In relation to ROCs certifying the matters within section 32B(2AB) or (2AC), this change is achieved by inserting a new article – article 13A – into the 2006 Order: see article 10 of this Order.

The 2006 Order has also been amended so as to allow an operator of a small generating station (that is to say, a generating station with a declared net capacity of no more than 50 kilowatts) to appoint an agent to receive ROCs on his (the operator’s) behalf. This is achieved by the new article 15A, which is inserted into the 2006 Order by article 13 of this Order.

In light of the changes discussed in the previous paragraphs, ‘consequential’ amendments have been made to articles 3, 9, 11, 15 to 21, and 28 to 31 of, and paragraphs 2, 5 and 8 of Schedule 2 to, the 2006 Order: see articles 4, 6, 8, 12, 14, 15, and 17 to 25 of this Order. In addition, two new articles – articles 17A and 17B – have been inserted into the 2006 Order: see article 16 of this Order.

The key consequential amendments concern ROCs which relate to electricity generated by more than one generating station. By virtue of article 16(8A) of the 2006 Order (inserted by article 14(5) of this Order) and new article 17B of the 2006 Order (inserted, as noted above, by article 16 of this Order), a ROC may relate to electricity generated by two or more generating stations where (in a nutshell)—

(a) each of the generating stations is a small one, located in England or Wales, generating electricity from the same renewable energy source;

(b) the operators of those generating stations have each appointed the same person to act as their agent for the purpose of receiving ROCs; and

(c) ROC-entitlement in relation to each of those generating stations is determined in the same way (either on a monthly basis or on an annual basis).

A number of other amendments, unrelated to the foregoing changes, have been made to the 2006 Order. The key ones are as follows—

(a) the definition of “energy crops” in article 2(1) has been expanded to ensure that certain (named) crops, if planted after 31st December 1989, are covered. The crops in question are miscanthus giganteus, short rotation coppice willow, and short rotation coppice poplar (see article 3(2) of this Order);

(b) two new paragraphs – paragraphs (1A) and (1B) – have been inserted into article 2 of the 2006 Order so as to enable a non-fossil fuel which is not biomass to be treated as biomass if it is used with at least one other non-fossil fuel by a generating station and 90% or more of the total energy content of those fuels is derived from biomass (see article 3(3) of this Order);

(c) the caps set out in article 14(2) of the 2006 Order (which mean that an electricity supplier can discharge only a limited percentage of its renewables obligation by the production of ROCs which relate to electricity generated by a generating station which is fuelled partly by fossil fuel and partly by biomass) have been disapplied in relation to the production of ROCs if and to the extent that those ROCs relate to electricity generated by energy crops (see article 11 of this Order);

(d) the notice period set out in article 21(2)(a) of the 2006 Order (which means that the operator of a small generating station must give at least one month’s notice to the Authority, Ofgem, if his entitlement to ROCs is to be determined on the basis set out in article 21) has been removed (see article 20(2)(b) of this Order); and

(e) articles 7(3) and (4) and 10 of, and paragraphs 9 and 10 of Schedule 3 to, the 2006 Order have been omitted: see articles 5, 7 and 26 of this Order.

A regulatory impact assessment is available and can be obtained from the Energy Markets Unit, Department of Trade and Industry, 1 Victoria Street, London, SW1H 0ET. Copies have been placed in the libraries of both Houses of Parliament.