ROs, ROCs, EMRs and CfDs - what are they? - Maxwell Grant, Reduce Business Costs | Procurement Specialists, Salisbury
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May 14, 2014

ROs, ROCs, EMRs and CfDs – what are they?

With the government introducing changes to solar energy subsidies which will move large scale solar projects out of the RO and into CfD, here is a quick guide to what these terms mean:

RO – Renewables Obligation:  A subsidy mechanism designed to support the development of clean energy projects in UK.  It was introduced to make energy suppliers get more of their electricity from renewables.

  • Generators of renewable energy are granted a Renewable Obligation Certificate (ROC) which corresponds to a certain level of energy production (e.g. rooftop solar – 1.7 ROC/MWh; solar farms 1.6 ROC/MWh
  • Can sell their ROCs to energy companies which allows them to get a higher price for their electricity
  • Energy companies use ROCs to meet certain quotas – failure = fine
  • This money goes into a fund which adminsters the scheme with any extra cash being given to the clean energy operators

EMR – Electricity Market Reform:  This introduces Contracts for Difference (CfD) which sets the price of electricity that energy companies buy from the generators.  This was designed to protect investors in new projects from any market fluctuations.

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