Ofgem announces Renewables Obligation for energy suppliers

13 August 2007
Energy regulator Ofgem has announced the Renewables Obligation for energy providers for the 2006-2007 period.

The Renewables Obligation is administered by Ofgem on behalf of the Government – it determines the minimum amount of renewable energy that suppliers must sell to consumers each year, else they will be in breach of the Electricity Act of 1989.

According to information received from suppliers, the total Renewables Obligation on electricity supplied to customers across the UK is 21,629,676 megawatt hours (MWh), made up of electricity supplied in England and Wales at 19,390,016 MWh, on 2,022,791 MWh supplied in Scotland and 216,869 MWh on electricity supplied in Northern Ireland.

Suppliers can comply with the obligation set them by presenting Ofgem with Renewables Obligation Certificates – issued to suppliers for having renewable energy generators – or by paying £33.24 for each MWh shortfall, or a combination of both.

The obligation to supply part of their energy from renewable resources began in April 2002. Ofgem – the Office of Gas and Electricity Marketing – regulates monopolies and ensures that the energy market remains competitive and that consumers are given choice and value.

Britain’s current green energy production accounts for just 2% of the UK energy market, far behind its European peers, such as Germany which is at 7%; the EU average is 13%. Britain’s failing green energy targets could see a rise in energy prices if suppliers are unable to meet green demands and pass on the shortfalls to their customers.

The Guardian has reported today, that, despite Tony Blair’s signing of an agreement that would see 20% of Britain’s energy coming from renewable sources by 2020, and the Government’s claims of being a world leader on climate change, officials from the Department of Trade and Industry have admitted that Britain will miss this target by a long way, and that “statistical interpretations of the target” should be used to correct this, rather than finding new ways of reaching it.

According to The Guardian, which obtained a copy of an internal briefing paper from The Department for Business, Enterprise and Regulatory Reform, reported that “the best the UK could hope for is 9% of energy from renewable sources such as wind, solar or hydro by 2020.”



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