Renewable Energy Barriers and UK Renewable Obligations Certificate (ROC)

               


                           

When environmental issues, long term supply and future economical aspects are taken into account, the design and implementation of a renewable energy commercial international system should be created and adhered to in order to solve world's energy problems and possibly, reducing some of the impacts related to climate change.

That means in order to be able to provide a stable supply of sustainable energy, protecting the environment, curbing CO2 emission and, in the case of energy crops being used as a source of energy, an actual reduction of CO2 in the atmosphere, barriers to the implementation of the above should be removed permanently, first.
Fortunately, these barriers can be dealt with successfully if and when international, national and local agreements 'implemented' by all parties. According to Johansson, et. al., 1993, there are many opportunities exist to overcome these difficulties.

- Financial constraints which limit greater deployment of renewable technologies. This barrier lies in the perceived risk associated with investing in renewable energy technologies, which is generally higher than competing in conventional technologies and the effects of this higher perceived risk on a technology's market.
- Many of the technologies are new on the capital markets and as such there is more risk than in using established technologies. The higher the perceived risk, the higher the required rate of return demanded on capital.
- The perceived length and difficulty of the permitting process is an additional determinant of risk.
- The high financing requirements of many renewable energy technologies often present additional cost-recovery risks, for which capital markets demand a premium

Possible Recommendations.
- Low interest loans or loan guarantees might serve to reduce perceived investor risk;
- Tax credits for renewable energy technology production through the early, high risk years of a project may provide another mechanism for renewable energy development.
- Regulatory cost recovery mechanisms (which today often favour low initial cost and fuel based technologies) can be modified to recognise life-cycle cost as a more appropriate determinant of cost effectiveness.
- Effective redistribution of government spending in research and development that directly reflects the potential of renewable energy technologies.
- Part of the local and national laws and regulations should be born out of international laws and regulations, directly and/or indirectly.
Renewable Obligation Certificate (ROC)
In the UK, the government has set up a Renewable Obligation Certificate (ROC) (Biomass Task Force, 2005) in relation to the use of energy. This certificate details:
a. 11% of electricity should be renewable by 2011;
b. 20p/l tax rebate for bio diesel;
c. Direct support for renewable energy;
d. 20% GHG reduction target by 2020;
e. Climate Change Levy/Carbon Trust;
f. Emissions Trading Scheme (2002);
g. Set-aside payments for non-food crop production.

According to Ofgem (Ofgem, 2009) 'A Renewables Obligation Certificate (ROC) is a green certificate issued to an accredited generator for eligible renewable electricity generated within the United Kingdom and supplied to customers within the United Kingdom by a licensed electricity supplier. One ROC is issued for each megawatt hour (MWh) of eligible renewable output generated'.
The ROC certificate became law in 2005 when the government issued the Renewable Obligation Order 2005. The ROC obliged the power generating providers a percentage of their electricity produced from renewable sources. According to previous governmental legislation as early as 2002, every year the percentage of electricity from renewable sources should be increased e.g. 2006 6%, 2007 7% and so on, reaching 11% by 2011.
 Power generating companies who cannot provide proof (certificates) related to the above, can be fined. As a digital certificate, the renewable obligation certificate (ROC) holds information concerning the production of renewable electricity per unit.

The certificate can be traded as they are guaranteed by the government.
Climate Change Levy Exemption Certificate and Market/Role of CCS (Carbon Capture and Storage)
The summary of the LEC and CCS has been outlined in the following points:
1. The Fossil Fuel Levy, a dormant levy on the electricity bill: originally created to support the nuclear industry, it will be reintroduced to provide long term funding for zero-carbon technologies
2. In 2001, the government introduced a Climate Change Levy, a tax on energy used in the non-domestic sector, in order to encourage energy efficiency and reduce emissions of GHG. The levy was repaid to businesses in the form of lower N.I.
3. The 2003 report 'Towards a Non-Carbon Fuel Economy, Development and Demonstration' introduced carbon tax, a direct payment to the government based on the carbon content of the fuel being used. This was a replacement for the Climate Change Levy
4. Preference shown to the purchase of goods from countries that have taken demonstrable steps to reduce their greenhouse emissions
5. When it comes to biomass as a source of energy, the documents asked and discussed questions such as: UK leads in biomass technology: What are the benefits? Export opportunities
Before investment occurs, there is a need for a long term price signal, as well as regulations and ownership. How much energy is used just in crushing the biomass (in reference to Mills)? Operation problems, furnace, types and problems related to their short and long term usage. Fuel logistics: type of furnace and maximum load. Energy Crop and co-firing post 2009. Technology used for Biomass (co-firing);
6. Decommissioning of the UK's electricity generators fleet, which will reach 30% by 2020
7. Decommissioning of North Sea Oil/Gas
8. Plant assessments, laboratory and rig testing (for a particular application)

References

Biomass Task Force (2005) Biomass task force report to the government. Department of environment, food and rural affairs (Defra) publications, London. CVBP interim test burn emissions report, (2003).
EPIA (2009) Overview of European PV support schemes (last update on 8/05/2009) http://www.epia.org/index.php?id=463 7.7.2009
Johansson T.B., Kelly H., Reddy A.K.N., Williams R. H. (1993) Renewable energy: source for fuels and electricity.
Ofgem (2009) Renewables Obligation - What is the renewables obligation (RO)? Sustainability, environment 17. 4.2009

By Najib_Altawell
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