The concept of banding is the principal change to the RO and represents a significant amendment to the original scheme introduced in April 2002. Banding provides different levels of incentive and aims to provide the flexibility necessary to increase renewable electricity generation in the years following 2009.
Under the ROO200912, EfW with CHP plants continue to receive 1 ROC/MWh of electricity generated. Dedicated biomass CHP plants will receive 2 ROCs/MWh, as opposed to 1.5 ROCs/MWh for electricity-only biomass plants. A table showing the banding' for ROCs can be found in appendix 2 of Ofgem's Renewables Obligation Guidance on Fuel Measurement and Sampling13. In all cases ROCs are awarded on the energy derived from the biomass content of the relevant fuel and only where the CHP achieves the Good Quality CHP criteria (GQCHP), which is also detailed in the UK CHP Quality Assurance ("CHPQA") programme's Guidance Note 44 (GN44). The number of CHP ROCs issued to a station accredited under the CHPQA programme will also depend on the efficiency of that station. This will be determined by the relationship between its qualifying power output (QPO) and the total power output (TPO). Note: GN 44 also includes an explanation of the reduced efficiency criteria required by renewable CHP schemes producing over 25 MWe in order to establish their eligibility for ROCs.
Between October 2002 and January 2010 average ROC auction prices were between £38.42 and £53.27/MWh. The 2009/10 buyout price for ROC is expected to be £37.19/MWh.
The 1 ROC/MWh allocation for EfW with CHP reflects the fact that gate fees underpin the economics of waste fired CHP. Higher ROC allocations for dedicated biomass CHP are in recognition of the need for these projects to pay for their fuel and also reflect costs associated with installing heat recovery and supply equipment (along with the additional maintenance and management costs) as well as the higher risks associated with heat supply contracts.
Guidance on the operation of the RO is on the Ofgem website14
Note: DECC announced on 29 January 2010 that they were reviewing their policy of not 'grandfathering' ROC support for biomass electricity. With most technologies DECC policy is not, as a rule, to change the level of ROC support once a generating station is accredited by Ofgem - i.e. support is 'grandfathered'. This is not currently the case for biomass which has caused investment concerns.
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12 http://www.opsi.gov.uk/si/si2009/uksi 20090785 en 1
13http://www.ofgem.gov.uk/Sustainability/Environment/RenewablObl/Documents1/FMS%20final.pdf
14http://www.ofgem.gov.uk/Sustainability/Environment/RenewablObl/Pages/RenewablObl.aspx