Monday, June 04, 2007

Cap on ROC values in Energy White Paper

Has anyone else noticed that the Energy White Paper has effectively capped the value of ROCs after 2015/16 when the headroom mechanism kicks in?

Assuming the 15% target has been met, the target for any year will be set at 6% more than the anticipated delivery of ROCs in that year - effectively limiting the recycle value to 6% of the buyout premium. This must be a slap in the face for people with long term ROC eligible projects (I'm thinking onshore wind), where this was going to be a big part of revenues in later years.

The flip side is that if (and it's a biggish if) additional renewables capacity comes through as a result of banding, at least the bottom won't fall out of the market.

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