The Renewables Obligation (Amendment) Order 2011

EXPLANATORY NOTE

(This note is not part of the Order)

This Order amends the Electricity Act 1989 and the Renewables Obligation Order 2009 (“the 2009 Order”) and makes transitional provision.

The 2009 Order imposes an obligation (“the renewables obligation”) on all electricity suppliers which supply electricity in England and Wales. Suppliers must produce, by a specified day, a certain number of renewables obligation certificates (“ROCs”) in respect of each megawatt hour of electricity that each supplies during a specified period known as an obligation period. The renewables obligation is administered by the Gas and Electricity Markets Authority (“the Authority”) who issue ROCs to renewable electricity generators in respect of their renewable output.

Articles 2 to 6, 9, 10, 13, 14 and 16 implement, in relation to the renewables obligation, Articles 17 to 19 of Directive 2009/28/EC of the European Parliament and of the Council on the promotion of the use of energy from renewable sources (“the Renewables Directive”). All other articles of this Order do not implement European Union obligations.

Article 2 amends the definition of “fossil fuel” in section 32M of the Electricity Act 1989, to remove bioliquids produced directly or indirectly from coal, lignite, natural gas, crude liquid petroleum or petroleum products from the scope of the definition of fossil fuel. In consequence, bioliquids produced directly or indirectly from those products will fall within the definition of renewable sources set out in that section. Article 2 also inserts into that section a definition of “bioliquid”.

Article 3(2) inserts new definitions into article 2 of the 2009 Order, including a definition for fossil derived bioliquid (which is a sub-category of all bioliquids). Article 3(3) substitutes the definition of “total installed capacity”.

Article 3(4) amends article 2(2) of the 2009 Order to set out the meaning of references to the energy content of a fossil derived bioliquid in any month during which the fossil fuel proportion of that fossil derived bioliquid varies. Article 3(5) amends article 2(4) of the 2009 Order to set out how the provisions of the 2009 Order apply if fossil derived bioliquid is mixed with other categories of fuel (such as biomass which is not a bioliquid).

Articles 4 and 5 amend the provisions in articles 3 and 4 of the 2009 Order for determining the proportion of waste and biomass which is composed of fossil fuel.

Article 6 inserts a new article 4A into the 2009 Order. The new article 4A sets out how to determine the proportion of a fossil derived bioliquid which is to be treated as being composed of fossil fuel. ROCs will not be issued in respect of the generation of electricity attributed to the proportion of the fossil derived bioliquid which is treated as being composed of fossil fuel (Part 5 of the 2009 Order).

Articles 7, 8 and 15 amend article 17A of the 2009 Order and insert new articles 17AA, 17AB and 58A. For those offshore wind generating stations that register turbines under the new article 58A, the new article 17AA provides that the 20 year maximum period for receipt of ROCs for the generation of electricity from each registered turbine will run from the date of registration of the turbine (and not from the date of accreditation of the generating station). The new article 58A imposes restrictions on those turbines which are eligible to be registered and on when registration may take place. The new article 17AB prevents the issue of ROCs in respect of electricity generated by a wind turbine which is eligible to be registered under article 58A, but which has not been registered under that article.

Article 9 amends article 22 of the 2009 Order to widen the exceptions to the circumstances in which no ROCs are to be issued.

Articles 10 and 16 insert new articles 22A and 22B and new Schedules A1 and A2 into the 2009 Order. The new articles 22A and 22B set out additional circumstances in which ROCs are not to be issued in respect of electricity generated from bioliquid. The new article 22A includes a requirement that no ROCs are to be issued in respect of any electricity generated using bioliquid that does not meet the greenhouse gas emission criteria (which are set out in the new Schedule A1) and the land criteria (which are set out in the new Schedule A2).

Articles 11 and 17 make amendments to article 30A of the 2009 Order and to Part 1 of Schedule 2 to the 2009 Order in consequence of the definition inserted into article 2(1) of the 2009 Order for “offshore” in relation to a generating station and the substituted definition for “total installed capacity”.

Articles 12 and 18 amend article 54 of the 2009 Order and insert new Schedules 3A and 3B. Article 54 of the 2009 Order requires certain information to be provided to the Authority where electricity is generated from biomass. The amendments made by article 12 extend these information requirements to fossil derived bioliquids, but remove them from biomass that is, or is derived from, waste. The amendments also impose new information requirements where electricity is generated from biomass (other than bioliquid), including information requirements relating to the greenhouse gas emissions from the use of the biomass to generate electricity (which is to be calculated in accordance with the new Schedules 3A or 3B as applicable).

Article 13 inserts a new article 54A into the 2009 Order, requiring operators of generating stations claiming ROCs for the generation of electricity from bioliquid to provide a bioliquid sustainability audit report and to make related provision.

Article 14 amends article 57 of the 2009 Order, to require the Authority to provide certain information to the Secretary of State.

Article 19 makes transitional provision in respect of the obligation period ending on 31st March 2011.

The European Commission has adopted guidelines (OJ L 151, 17.6.2010, p.19) to serve as the basis for the calculation of land carbon stocks as required by paragraph 10 of Part C of Annex 5 to the Renewables Directive.

A transposition note is annexed to the explanatory memorandum which is available alongside the Order on www.legislation.gov.uk. Impact assessments of the effect that this Order will have on the costs of business and the voluntary sector are available alongside the Order on that website.