Renewables obligation (RO) transition: fixed price certificate scheme (FPC Scheme)
Produced in partnership with Andreas Formosa of Clifford Chance
Renewables obligation (RO) transition: fixed price certificate scheme (FPC Scheme)

The following Environment guidance note Produced in partnership with Andreas Formosa of Clifford Chance provides comprehensive and up to date legal information covering:

  • Renewables obligation (RO) transition: fixed price certificate scheme (FPC Scheme)
  • What is the fixed price certificate scheme?
  • Design of the FPC Scheme
  • Key unknowns
  • Impact of the FPC Scheme on market participants

What is the fixed price certificate scheme?

Sections 32N–32Z2 of the Electricity Act 1989 (EA 1989) provide for the closure of the Renewables Obligation (RO) and for the transition of the RO scheme to a fixed price certificate scheme (FPC Scheme). This is to reduce the risk of volatile and increased prices of RO certificates (ROC) in the final ten years of the RO. For more information on the RO scheme and its closure, see Practice Notes: Renewables Obligation (RO)—key features and The Renewables Obligation Closure and Grace Periods: a consolidated summary. The government, in its 2011 energy white paper and subsequent consultations, explained that the risk of increased prices and higher volatility in prices is due to the fact that, following the closure of the RO to new projects in 2017, there will be a closed and diminishing pool of capacity (as RO-accredited generators are decommissioned, or at least until they are no longer eligible to receive ROCs).

Design of the FPC Scheme

While EA 1989 provides for the general framework of the FPC Scheme, the Secretary of State has not yet issued an order under EA 1989, s 32 on the detailed design of the FPC Scheme. However, set out below is an overview of the FPC Scheme based on EA 1989 framework and on the