Electricity Market Reform (EMR)—how has the transition from the Renewables Obligation (RO) to the Contracts for Difference (CfD) regime worked?
Produced in partnership with Matthew Collinson
Electricity Market Reform (EMR)—how has the transition from the Renewables Obligation (RO) to the Contracts for Difference (CfD) regime worked?

The following Energy practice note Produced in partnership with Matthew Collinson provides comprehensive and up to date legal information covering:

  • Electricity Market Reform (EMR)—how has the transition from the Renewables Obligation (RO) to the Contracts for Difference (CfD) regime worked?
  • How are contracts for difference (CfD) and the renewables obligation (RO) connected?
  • The timing of closure of the RO
  • Could generators choose between the RO and CfDs during the transition period?
  • Are there circumstances when a generating station could gain support from both the RO and CfD?

How are contracts for difference (CfD) and the renewables obligation (RO) connected?

The renewables obligation (RO) is intended to support investment in renewable generation projects. It does this by placing customer-facing electricity suppliers—who (directly or indirectly) purchase their electricity from generators—under an obligation to source an increasing proportion of their wholesale electricity from renewable sources. The required proportion is set by the Secretary of State (SoS) for Business, Energy and Industrial Strategy (BEIS).

The supplier evidences its purchases of renewable electricity by the submission of ‘renewable obligation certificates’ (ROCs) to the Office of Gas and Electricity Markets (Ofgem).

Electricity suppliers are required to evidence their purchases of renewable energy by submitting ROCs to Ofgem. New ROCs are only issued to accredited renewable generators in order to incentivise suppliers to buy their renewable energy (and accompanying, separately priced ROCs) from renewable projects, thus providing those projects with an element of financial support.

For more information, see Practice Note: Renewables Obligation (RO)—accreditation of renewable electricity generators.

On 31 March 2017 the RO closed to new generation of most types. The RO will continue to support generators accredited prior to its closure (or within certain ‘grace pe

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