What is a ROC?
The Renewables Obligation (RO) is the UK’s policy for increasing the contribution of energy from renewable sources to fulfil the EU Renewables Directive. The RO requires licensed electricity suppliers to source a percentage of their sales from eligible renewable sources. This percentage increases each year, starting at 3% in 2003 and reaching 10.4% by 2010. Each MWh (i.e. 1000 KWh) of renewable electricity generated is accompanied by a Renewables Obligation Certificate (ROC). At the end of each year, electricity suppliers must provide the electricity regulator with the appropriate number of ROCs to prove that they have fulfilled their RO. If they cannot produce the required number of ROCs, they pay a ‘buy-out’ fee for every MWh that they are short. ROCs, in this unique system, are the currency of the RO. They can be traded, with suppliers buying them from generators, brokers or other suppliers. When insufficient electricity is generated from renewable sources to meet the demands of sup
