Renewables Obligation

    Financial Incentives

What are ROCs?

ROCs are a government scheme aimed at encouraging renewable energy generation across the UK. Generators and suppliers of electricity are involved in the scheme, which operates via a market mechanism, where certificates can be traded in order to meet government targets for generation. It is primarily aimed at medium to large scale businesses, but if you have a renewable generation system with over 50kW of capacity, you will be eligible to apply. The Feed in Tariff (FiT) is used to encourage uptake of small scale renewable installations.

How do they work?

The certificates are issued to generators for each unit of renewable energy they produce. The operators can then trade their certificates at the market rate, with energy suppliers then using the certificates to meet their ‘obligation’. Each year the obligation increases, with the current level meaning that 20.6% of generation must be met by ROCs, or by the ‘buy out’.

Where suppliers do not have enough ROCs to meet their obligation, they must pay a buyout price currently set at £42.02 per MWh (this increases annually in line with the RPI), or buy more ROCs from the market.

The buy out money collected by Ofgem (who regulate the scheme) from the suppliers is then redistributed in proportion to the amount of ROCs they produce, creating a ‘win-win’ for those suppliers that produce the most ROCs.

What is the value of a ROC and how does it vary?

The value of ROCs fluctuates with the market. If there is an excess of production in the market, the price would fall below the buyout price, whereas if there is a dearth of production, the price will rise above the buyout, as suppliers anticipate a windfall from defaulting suppliers having to make up their obligation with a large buy out.

Although there has been some variability in the price, generally the value of ROCs has stayed fairly steady just above the buy out price, and is currently sitting at around £43 per MW. This is partly due to the government ensuring that there is always a demand for ROCs by creating an artificial excess demand of 10%.

Who is eligible for ROCs?

Any company generating more than 50kW of renewable power is eligible to receive ROCs. Renewables covered under the scheme include: Anaerobic Digestion, Biomass, Hydroelectric (excluding some large scale installations), Tidal, Wind, Solar PV, Landfill Gas, Sewage Gas and Wave Power. Some technologies, although eligible, tend not to receive support due to the prohibitive cost involved.

Are all renewables treated equally?

Originally when the scheme launched more than 10 years ago, each type of renewable covered received 1 ROC per MW. This was to allow as free a market as possible for all technologies. There have been some tweaks over the years however, and now there are a few exceptions to this rule: Offshore wind in particular receives 2 ROCs per MWh, whilst Sewage Gas now only receives half a ROC per MWh. Solar also benefits more than other technologies, with roof mounted systems receiving 1.7 ROCs per MW and ground mounted 1.6 ROCs.

How do they compare with Feed in Tariffs?

Feed in Tariffs are much more straight forward, and are aimed at smaller generators (less than 5MW). They offer a guaranteed price for the energy produced, whereas ROCs can vary greatly from one time to another. They are fixed for 20 years and generally offer a greater return than ROCs. If you are eligible for both schemes, you will need to decide which one benefits you more, as you cannot receive both.

The future of ROCs

By 2017, ROCs will be phased out in favour of the Contract for Difference (CfDs), although a grandfathering scheme will mean that those who have already signed up will be allowed to choose whether to opt for the new scheme or stay on with ROCs.

The CfD scheme will include nuclear generation and carbon capture and storage, somewhat controversially. From mid 2014, new generating capacity will be able to apply for either scheme – you can read more about CfD here.

How do I apply for ROCs and how do I manage them?

An application can be submitted via the ‘Renewables and CHP Register’, where you will be expected to complete an application, make certain declarations, and submit monthly meter readings. The system also allows you to receive or transfer the certificates once accepted. Typically the ROCs are either auctioned to the highest bidder (with an administration fee), or a Power Purchase Agreement is made with a supplier.

    Wind Farms


Wind turbines on a commercial scale

For wind turbine basics and an explanation on how they work, please visit the Wind Turbines section. The major difference between residential and commercial is the scale. While a wind turbine on your house may produce some or all of your electricity needs, a wind farm (a collection of commercial wind turbines) can provide electricity for many thousands of houses.

While most residential wind turbines tend to be less than 50kW, the largest commercial turbines found on wind farms are now in excess of 6MW. The largest turbine to date, the Enercon E-126 has a hub height of 135m, and a rotor diameter of 126m. It was originally designed to produce 6MW of electricity, but the capacity has been upped to 7.5MW. This one wind turbine can provide enough electricity for approximately 5000 households.

Maximising the power produced by a wind farm

There are numerous features that commercial wind turbines use to maximise the amount of power they produce.

Firstly the pitch of the rotors is automatically altered to catch the most wind. The yaw angle is a misalignment between the direction of the wind and the turbine pointing direction, therefore the turbine is actively controlled by an automated wind vane to minimise this angle – again maximising the power of wind.

Many old style wind turbines rotate at the same speed regardless of the wind strength due to a gearing system within the generator, however new turbines including the E-126 are gearless, with the blades rotating at whatever speed generates the most electricity. Gearless generators are more efficient, as energy is not lost via the gearing system.

The towers tend to be at higher altitudes as at altitude the surface aerodynamic drag is lower, so wind speeds are higher and more constant.

Finally the blades are made from glass-fibre reinforced polyester or wood-epoxy, so they are lighter than old style turbines, and they can therefore accelerate quicker to adapt to wind strength.

What is a wind farm?

Onshore vs. offshore wind power

A wind farm is a collection of commercial size wind turbines located either inland (onshore) or out at sea (offshore). Onshore wind has a much bigger presence in the UK at the moment, just because the technology to support it has been around for much longer than offshore wind. Therefore onshore wind at the moment provides a much higher percentage of the total energy mix than offshore wind in the UK.

In the UK, both onshore and offshore wind farms are subsidised through the Renewables Obligation Certificates (ROCs), with onshore wind farms supported by 1 ROC and offshore wind farms by 2 ROCs. As the UK is a member of the EU, subsidising industry goes against the spirit of the Single Market, however the exceptions exist in the renewable energy generation sectors.

This is because to get to a level playing field for wind power with the current fossil fuel technologies, European governments need to give these renewable industries a helping hand to encourage investment. As has been seen elsewhere in the industry, in the medium term, where investment has been followed by innovation, the price of these technologies has fallen. As a result in the UK, the governments have reduced ROC support gradually as this technology has become more price competitive.

The level of support for offshore wind farms needs to be greater as the technology is more expensive and there is quite a way for it to go before it reaches competitiveness vs. the fossil fuel technologies. Bloomberg New Energy Finance (BNEF), however calculates that the output cost of electricity by onshore wind from 2016, will reach parity with fossil fuels. This is to be driven by further efficiencies and developments in the technology.

Onshore and offshore wind in Europe

In Europe, the largest wind farm currently in production is the £4.5bn Markbygden Wind Farm based in Northern Sweden. This project will be finished by 2020 and will comprise of 1,101 turbines, made up of the E-126 turbines and Enercon E-101 (3MW outage), covering 450km2. The total energy output of the farm will be 12 terawatt hrs/year (TWh), which will be equivalent to the domestic consumption of 2 million houses per year.

As well as building wind farms on land, many offshore projects are being built around the continent. Europe is the leader in offshore wind energy, with the first farm being built in Denmark in 1991. As of 2010 there were 39 offshore wind farms located in waters across Europe. Like in the UK, the opinion is that offshore windfarms are now preferred over onshore windfarms because they are less obtrusive than those built on land, and their noise and size is mitigated by their location away from urban areas.

In addition, water has less surface roughness than land, so the average wind speed is higher out at sea so, thereby increasing the electricity generating capacity of these farms. However, there are environmental impacts to consider for offshore wind turbines – their construction can destroy fishing habitats, and there is a large amount of oil needed to lubricate efficient operation of turbines which has the potential to leak and affect the marine ecosystem.

Wind power development

Wind power is intermittent, only producing electricity when the wind blows and the blades are spinning, so without storage, wind power cannot be aligned to the demand fluctuations very easily. Many larger power stations also lack flexibility in their production of electricity, for example, a nuclear or coal power station produces the same amount of electricity every minute, and this electricity cannot be stored.

Throughout the day there is differing demand for electricity, so during night the demand is lower than at dinner time for example. Therefore, within the electricity mix there needs to be a variety of sources to deal with this fluctuation in demand and one of the most flexible is hydroelectric. This can be turned on and off within seconds to meet any extra demand. Tethering of wind turbines to hydroelectric facilities is currently being investigated; by using the wind power to pump the water back to the top reservoir, the whole system requires no external power support so is completely green and is therefore a very flexible electricity production method.

UK commercial wind power policy

In the UK, there is a largely confusing message projected concerning the future of wind power. While many scientists, investors and environmentalist groups are unequivocal in their support, others have voiced their opposition, particularly on the subject of onshore wind. Although onshore technology is now developed and building windfarms is relatively cheap, environmentalists have objected to more being built as they further blight an already disappearing countryside. Those that support onshore wind have criticised successive governments for reducing, and signalling further reductions in the ROC support.

Offshore wind has been hailed as ‘the future’ for renewable power and a technology where UK engineering can really excel, and export that expertise for the benefit of growing a low carbon economy. Bodies like the Energy Intensive User Group, on the other hand, object to the level ROC support for offshore wind (currently 2 ROCs as mentioned above), and call for a solution that is based on economics and cost – such as increased efficiency measures, increased nuclear and increased onshore wind.

Despite the confusing messages, investment and implementation of onshore and offshore wind continues in the UK and in particular Scotland. For example, in early 2012, SSE, announced that it had surpassed 1GW of energy generation from its onshore wind farms. Further investment is being planned by companies such as InfinergyVattenfall and Gamesa in both of these two technology areas. Offshore however is going to require more technological advancement before it sees accelerated growth and energy cost parity with other technologies.

In Europe, the trend has continued to accelerate commercial wind development. There is much ongoing research into wind turbines and the aim is to increase their capacity and output. Denmark is leading the way with ambitious target setting – planning to deliver half of its renewable energy output with wind power. Other big projects include: (1) Norwegian company Sway is currently building a 10MW turbine that is due for completion this year (although it will undergo two years of testing); (2) Plans afoot to build a 15MW turbine off the coast of Spain by 2015, called the Azimut.


Read our thoughts on the future of wind power here.

    Wave Energy

    Future Ideas

What is wave energy?

There are many different designs out there that harness the energy from our oceans’ waves. Wave energy uses the movement of waves to generate electricity. The technology is continually being modified so that it may one day be able to contribute a large proportion of the energy needed to power coastal countries. If the UK were to harness this technology it could supply a lot of power to the coastal towns and villages. Australia, for example, could supply over 60% of its own energy from wave energy alone. It certainly also helps when countries also have over 300 days of sunshine and can harness solar power as well.

How does wave energy work?

Below are three examples of wave energy, technological solutions:

Oscillating water column (OWC)

For OWC technology, it is not the waves that move the turbines directly, but a mass of compressed air that is pushed by these waves. This involves a structure usually located in a breakwater, the upper part of which houses an air chamber (thus the compressed mass of air) and its lower part is being submerged under the water. In this way, the turbine takes advantage of the movement caused by waves, both when they come in and when they go out, and the doubly-fed generator (both by its rotor or mobile part and by the stator or fixed part) to which it is coupled then feeds energy to the grid.

Floatation platforms

The platforms draw energy from wave power by floating with the rising and falling motion of waves. The floats are attached by arms to a platform that stands on legs secured to the sea floor. The motion of the floats is transferred via hydraulics into the rotation of a generator, producing electricity.

Channelling the wave

A third approach is to use channels near the shore to store the energy in an elevated reservoir.  Then as the water flows back out of the reservoir a standard hydroelectric water turbine is used to generate electricity.

Seafloor carpets

Harnessing the power of waves from the seafloor has often been touted as the best possible way. This is because of the lack of disruption to fishing, leisure and shipping that is often caused by surface-based technologies. These seafloor carpets use the turbulence created by the waves above to power pistons and create hydraulic pressure, which can be turned into electricity to power homes, or used for desalination.

UK wave energy development

In the UK, wave energy is classified as part of marine energy, along with tidal energy. This is why in policy terms sometimes these two areas are referred to interchangeably. In January 2012, there was an announcement of the creation of the first Marine Energy Park (MEP) in the south-west of the UK. This will allow the collaboration between the private and public sector to embark on wave and tidal projects from Bristol to Cornwall and the Isles of Scilly.

Wave energy like tidal power is supported by tradeable ROCs. The current level of support is 2 ROCs per MWh of electricity generated. After the 2011, the level of support is to increase to 5 ROCs per MWh. The idea is that for the next few years the UK government needs to support emerging technologies so that they can become the cutting edge solutions of the future. As the technology in this is still developing, the output cost of electricity produced is greater than for fossil fuels. It is for this reason that both UK and Scottish Governments have a large role to play. The Green Investment Bank, when it goes live, is more likely to lend to projects that are close to mass scale expansion rather than funding any research and development stages.

Berkeley, California, and the seafloor carpet

A team including, Reza Alam and Marcus Lehmann, have come up with a revolutionary way of tapping the constant 24/7 power of the wave. Instead of trying to harness the energy from the surface, potentially causing disruption to shipping, fishing and leisure, they have come up with a renewable energy source based on the sea floor. They suggest that just one square metre can power two homes and just 10m of Californian coastline can provide as much electricity as a whole football, or ‘soccer’ as they say over in the States, field’s worth of Solar Photovoltaic Panels.

The idea was first thought of when it was realised that patches of muddy ground found off the coastlines of Northern America, reduced the dominance of waves hitting the shore. The oscillation of the waves would gently push the mud up and down, causing a build up of heat as a result. This turbulence, absorbed by the muddy floor, would be the perfect 24/7 dense form of energy generation.

Double action cylinders, holding a carpet that is currently a thin sheet of rubber in testing but due to change to an alternative durable substance, which are forced up and down by the waves, create hydraulic pressure. This can then be passed along the sea floor and onto the shore where it then can be exchanged and transformed into electricity.

Thought to be made commercially available before 2026, this is certainly the next big thing regarding sustainable, renewable wave technology.

    Hydroelectric Power


What is Hydroelectric Power?

Hydroelectric power is a very well established form of providing energy. In the last decade, 20% of the world’s electricity came from hydroelectric plants (88% of the renewable energy supply). This balance will change as there are now competing renewable energy generating sources like solar PV, and wind power. Hydroelectric power means harnessing power from moving water using an electric generator. In the UK, total hydroelectric power capacity is just under 2%, which makes up under a fifth of the total renewable energy generation capacity. When people around the world think about hydroelectric power, they probably think of the Hoover Dam, which is located on the Colorado River in the USA, between Arizona and Nevada. It was completed in 1936 and had a maximum generating capacity of 1.3GW.

How does Hydroelectric Power Work?

Power is generated as massive turbines spin, which is caused by water flowing over them. When the turbines spin the magnets in the generator, this causes a conversion of kinetic energy to electrical energy. The amount of power generated varies depending on the volume of water that passes over the turbines and the difference in height between the water source and the water’s outflow (known as the head). There are different bands of hydroelectric power plant, divided by the amount of energy they can produce. The power plant divides are as follows – large (few hundred MWs to 10GW), small (up to 10MW), micro (up to 100KW) and pico (under 5KW).

One of the major advantages of hydroelectric power is that it can be harnessed within seconds depending on demand, and as such is one of the only means of storing large quantities of electrical energy for peak demand. This is achieved by holding large amounts of water in a reservoir behind a dam with a hydroelectric power plant below. For example Dinorwig, in Wales can help provide emergency power to fill the demand gaps from a city such as Liverpool. Most power stations, including fossil fuel and nuclear have to stay on at all times as they take time to warm up to produce the power, and cool down for maintenance. As a result, these are used to service base demand, then hydroelectric power can service any spikes in demand, and then water can be pumped  back up into the reservoirs when demand is less (during the night).

Types of Hydroelectric Power

Hydroelectric Power Dam Storage

This is the conventional hydroelectric power station most people refer to when discussing hydroelectric power. It involves building a dam across a river, which traps the water creating a large artificial lake or reservoir behind it. To create electricity, gates are opened at the bottom of the dam and gravity pushes the water through the gates and down a pipe known as penstock, which delivers the water directly to the turbines built into the structure of the dam. This fast flowing water turns the turbines, and the generator system converts this kinetic energy into electrical energy. An example of a hydroelectric power dam, is the Kielder Water reservoir, located in Northumberland, operated by RWE Npower and is the largest system in England.

Hydroelectric Power Pumped Storage

Pumped storage hydroelectric power, as described in the Energy Storage section requires two reservoirs, one at high altitude and one at low altitude. When the water is released from the high altitude reservoir, energy is created by the downflow which is directed through high-pressure shafts, linked to turbines. This pressure drives the turbines which in turn power the generators that create the electricity. When the high altitude reservoir is empty, water is pumped back to it from the lower reservoir. This is linked with a pump shaft to the turbine shaft, using a motor to drive the pump.

In the UK, Dinorwig Hydroelectric Power plant uses pump motors that are powered from electricity from the grid, when the electricity is cheaper overnight, and demand is at its lowest. Hydroelectric power pumped storage generation therefore offers a critical back-up facility during periods of excessive demand, whilst being efficient in storing energy during periods of low demand.

Run-of-the-river Hydroelectricity

Some hydroelectric power systems utilise the natural flow of a river to create electricity without needing to build a dam. These types of hydroelectric power station involve forcing the river flow through penstocks and turbines to create the electricity, but the structures that are put across the river are far smaller than used in the hydroelectric power dam storage described above.

In Beeston, Nottinghamshire, the hydroelectric power plant run by United Utilities is the largest run-of-the-river system in England. The difference between a dam and a run-of-the-river system is that the latter uses free flowing water, and has minimal storage capacity, which has its advantages and disadvantages. The system requires volume of water passing through and without storage capacity may lack the power of velocity. The dam and the river systems can both be example of diversion schemes, where they can both use water that is channelled from a river or a lake

Hydroelectric Power Industry Development

In the UK, the largest hydroelectric power station is at Dinorwig, which is capable of generating 1.8GW of power in just 12 seconds. However looking around the world, this is dwarfed by the largest hydroelectric power station, the Three Gorges Dam located in China. This hydroelectric power plant has a generating capacity of 20.3GW, which at the time was expected to service 10% of China’s electricity needs, however since their demand has increased so dramatically in recent times, it currently only services about 3%.

Hydroelectric power generators in the UK are eligible for Renewable Obligation Certificates (ROCs) with stations commissioned after 2002 that have 20MW of power output and for all that are below this level. According to the DECC, there is no national strategy for nationwide development of hydroelectric power, but the government is committed to do everything in its power to support developers, community initiatives and small scale developers being able to invest and build hydro projects. In addition, schemes up to 50kW can only apply for FITs, whereas schemes between 50kW and 5MW can choose between FITs or ROCs.

    FiT Contract For Difference (cfd)

    Financial Incentives

The background to the Feed-in Tariff (FiT) Contract for Difference (CfD) mechanism

The government wants to ensure UK investment in energy generation. Some of this investment will be responsible to upgrade the existing network to cope with the future energy mix, while the rest will be used to provide a stable playing field so that enough investment happens in renewables and nuclear energy to further diversify our electricity generation.

The UK also has also signed up to stringent carbon reduction targets, which means it will have to cut emissions by 80% by 2050 (compared to 1990 levels). Electricity demand is expected to double in the same time period; therefore enough incentives have to be provided to ‘low carbon’ generators so that investment happens to meet these challenges.

What is a FiT CfD?

A Contract for Difference (CFD) is a private law contract between a low-carbon electricity generator and the government-owned company, Low Carbon Contracts Company (LCCC). The idea is that agreeing fixed rates for a certain number of years – settled at auctions – will incentivise companies to commit to producing low-carbon energy.

The FiT CfD works by guaranteeing a fixed price (strike rate) for energy generation companies, based on wholesale rates. The generators will then sell some energy to suppliers, and the cost at which they sell it at may be the same as the strike price; below it; or slightly above it.

The reason the government wants to use the CfD model within the Feed-in Tariff framework is that like existing FiTs it guarantees the generators a stable premium over a 15 – 20 year timeframe. This is important as many infrastructure projects such as a wind, solar farm or a biomass power station are evaluated over a long period of time. The start-up investments are sizeable, so potential investors need to have a certainty of returns.

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