Tuesday, June 12, 2007

New Value of ROCs Model

Finally, the new Value of ROCs Model is available.

Building from the Red Book dataset, it allows users to develop forecasts of the numbers of ROCs which may be available in the future, depending on the users' assumptions on the proportions of each renewable technology which may come to productive fruition.

We like to think it offers the most powerful, flexible and justifiable forecast for ROC value now available: and of course it includes all of the changes in the Energy White Paper - banding, RPI linkage retention, grandfathering and cofiring rule changes.

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.