asked Her Majesty's Government:
How the cost of purchasing a buy-out has compared with the market cost of purchasing a renewables obligation certificate from another supplier since the inception of the scheme. [HL874]
The buyout price was set at £30/MWh when the renewables obligation was introduced in 2002 and rises each year with inflation. The table below sets out the buy-out price for each of the years since its introduction.
Obligation Period Buyout Price per MWh 2002-03 £30 2003-04 £30.51 2004-05 £31.39 2005-06 £32.33 2006-07 £33.24 2007-08 £34.30
The price of renewable obligation certificates (ROCs) is set by the market and so will vary. A general indicator of market prices is provided by the Non-Fossil Purchasing Agency (NFPA), which holds quarterly ROC auctions. The average price of a ROC sold at these auctions is set out below.
Date Price per MWh 17 October 2002 £47.13 16 January 2003 £47.46 15 April 2003 £46.76 16 July 2003 £48.21 21 October 2003 £45.93 20 January 2004 £47.46 20 April 2004 £49.11 21 July 2004 £52.07 26 October 2004 £46.12 20 January 2005 £47.18 20 July 2005 £45.73 27 April 2005 £46.07 19 January 2006 £38.42 20 April 2006 £40.65 20 July 2006 £40.62 24 October 2006 £39.84 23 January. 2007 £46.17 24 April 2007 £47.50 17 July 2007 £47.74 9 October 2007 £49.26
A nominal price for a ROC can also be calculated by adding together the buy-out price for an obligation period and the recycle payment for the same period. Where a supplier has not paid more than this price for their ROCs there will be a net benefit to them from meeting their obligation by presenting ROCs rather than simply paying the buy-out price.