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Renewables Obligation

Volume 503: debated on Thursday 14 January 2010

To ask the Secretary of State for Energy and Climate Change what assessment his Department has made of the level of investment risk to companies participating in the construction of (a) non-offshore wind and (b) other renewable energy projects in circumstances in which the number of renewables obligation certificates (ROCs) to be allocated is not determined until the time of commissioning of a project; and for what reasons he decided that the number of ROCs to be allocated in respect of offshore wind projects should be determined at the construction stage. (305177)

The number of ROCs to be allocated to any project is determined at the time of accreditation by Ofgem. In order to provide certainty to investors, wholesale revisions to the banding regime (ROCs/MWh for each technology) will only be made in accordance with a scheduled banding review. Details of any changes to banding levels following a scheduled banding review will be published 18 months before they will take effect.

In response to evidence of a significant increase in the costs of offshore wind projects reaching financial close, we conducted an early review of the banding level for offshore wind. As part of the review process, we consulted during summer 2009 on two proposals for providing an uplift in support for offshore wind projects: one based around the timing of contract-signing and completing a foundation in the water, and an alternative proposal based around accreditation. These proposals were intended to ensure that any additional support was directed at those projects which we believed would not otherwise be able to proceed. In light of responses to the consultation, we decided to determine eligibility based on accreditation, in line with established RO policy for all other technologies.