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The Renewables Obligation (RO) was introduced in 2002 as a support scheme for renewable electricity projects.  It provided participants with financial support per unit of renewable electricity generated at a fixed rate for 20 years.

The scheme closed to all new entrants in April 2017 and was replaced with Contracts for Difference.

The RO worked by placing an obligation on UK suppliers of electricity to get an increasing proportion of their electricity from renewable sources. Companies do this through purchasing a Renewable Obligation Certificate (ROC) issued to an accredited generator for renewable electricity generated. It is proof that a certain amount of electricity has been generated from a renewable source.

A renewable generator therefore had two sources of income: income generated from the sale of electricity to the wholesale market (which does not distinguish between renewable and non-renewable energy) and income from the sale of ROCs.

This Library briefing paper on the Renewables Obligation Scheme, published in 2016 ahead of the scheme closure in 2017, provides background on the scheme.


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