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Volume 503: debated on Wednesday 6 January 2010

To ask the Secretary of State for Energy and Climate Change what assessment he has made of the effect on independent electricity producers of (a) the regime for the renewables obligation and (b) the redemption of renewables obligation certificates sourced from the co-firing of regular biomass set out on the draft Renewables Obligation Order. (307613)

There are 4,542 generating stations accredited and provided with support under the RO as of 14 December 2009. Over 90 per cent. of these stations are not vertically integrated with electricity suppliers.

Some industry stakeholders have raised concerns that the cap on the co-firing ROC market restricts competition and disproportionately penalises independent co-firers who, they felt, were forced to participate in a partitioned marketplace, meaning they had to accept significant discounts in price for their ROCs.

We commissioned Oxera to look into these concerns. Their report suggested that in the long run the cap is unlikely to significantly affect the ROC market for co-firing. There were some short-term concerns but following consultation we considered these were outweighed by the potential detrimental effect on the ROC value for all renewables technologies. The Oxera Report suggests that not having a co-firing cap could lead to a decrease in ROC values which could impact investment and delay deployment of new biomass stations.

Their report and the Government response can be found at: