The Renewables Obligation (Scotland) Amendment Order 2026
In accordance with section 32L(3) of that Act, a draft of this instrument has been laid before and approved by resolution of the Scottish Parliament.
Citation, commencement and interpretation1.
(1)
This Order may be cited as the Renewables Obligation (Scotland) Amendment Order 2026 and comes into force on 1 April 2026.
(2)
Amendment of the 2009 Order2.
The 2009 Order is amended in accordance with articles 3 to 5.
Amendment to article 42 - interpretation3.
““consumer prices index” means—
(a)
the consumer prices index calculated and published by the Statistics Board5, or(b)
where the index is not published for a month, any substituted index or figures published by the Statistics Board,”.
Amendment to article 43 - payments to discharge the renewables obligation4.
In article 43 (payments to discharge the renewables obligation) in paragraph (4)—
(a)
omit “and” after sub-paragraph (a),
(b)
in sub-paragraph (b) for “for each obligation period thereafter” substitute “for each subsequent obligation period up to and including the obligation period starting on 1 April 2025”
,
(c)
“(c)
for each obligation period thereafter, the buy-out price for the previous obligation period increased or, as the case may be, decreased by the percentage increase or decrease in the consumer prices index over the 12 month period ending on 31 December in the previous obligation period (the resulting figure being rounded to the nearest penny, with any half of a penny being rounded upwards).”.
Amendment of article 48 - shortfall in the buy-out and late payment funds: the total mutualisation sum5.
In article 48 (shortfall in the buy-out and late payment funds: the total mutualisation sum) in paragraph (8)—
(a)
omit “and” after sub-paragraph (a),
(b)
in sub-paragraph (b) for “for each obligation period thereafter” substitute “for each subsequent obligation period up to and including the obligation period starting on 1 April 2025”
,
(c)
“(c)
for each obligation period thereafter, the mutualisation cap for the previous obligation period increased or, as the case may be, decreased by the percentage increase or decrease in the consumer prices index over the 12 month period ending on 31 December in the previous obligation period (the resulting figure being rounded to the nearest penny, with any half of a penny being rounded upwards).”.
St Andrew’s House,
Edinburgh
This Order amends the Renewables Obligation (Scotland) Order 2009 (“the 2009 Order”).
The 2009 Order imposes an obligation (the “renewables obligation”) on all electricity suppliers which supply electricity in Scotland to produce a certain number of Scottish renewables obligation certificates (“ROCs”) in respect of electricity they supply to customers in Scotland during an “obligation period”. Each obligation period runs from 1 April to 31 March.
The renewables obligation is administered by the Gas and Electricity Markets Authority (“Ofgem”) which issues ROCs to accredited renewable electricity generators based on their output. These certificates are sold to electricity suppliers with or without the associated renewable electricity.
In lieu of each ROC, suppliers can also make a cash payment to Ofgem at a set price (the “buy-out price”). The buy-out price is indexed to inflation and has changed in line with the retail price index each year since the renewables obligation came into force. This Order provides for the buy-out price to increase (or decrease, as the case may be) in line with the consumer price index instead of the retail price index for all obligation periods from 1 April 2026 onwards.
The renewables obligation has a mechanism known as mutualisation which seeks to recover a shortfall of payments from suppliers if there is a payment default and the level of default is equal to or in excess of a threshold. There is a cap on the amount of mutualisation payments that can be made in respect of each obligation period (the “mutualisation cap”). As with the buy-out price, the mutualisation cap is indexed to inflation and has changed in line with the retail price index each year since the renewables obligation came into force. This Order provides for the mutualisation cap to increase (or decrease, as the case may be) in line with the consumer price index instead of the retail price index for all obligation periods from 1 April 2026 onwards.