PART 8Payments to discharge the renewables obligation, dealing with the buy-out and late payment funds

Payments to discharge the renewables obligation40.

(1)

A designated electricity supplier may (in whole or in part) discharge his renewables obligation for an obligation period (“the relevant period”) by making a payment to the Authority before the 1st September in the following obligation period (“the settlement period”).

(2)

The payment referred to in paragraph (1) is an amount equal to £X x (Y – Z) where—

(a)

X is the sum which corresponds to a renewables obligation certificate by virtue of paragraph (4);

(b)

Y is the number of renewables obligation certificates that the designated electricity supplier, if he makes no payment under paragraph (1), would have to produce to the Authority in order for him to discharge his renewables obligation for the relevant period in full; and

(c)

Z is the number of renewables obligation certificates that he has actually produced to the Authority for that period (or, where he has not produced any at all, zero).

(3)

Where a designated electricity supplier makes a payment to the Authority which is less than the amount calculated under paragraph (2), his renewables obligation for the relevant period will be discharged by that payment to the extent of the appropriate number of renewables obligation certificates, which is the quotient obtained by dividing the payment made by the sum which corresponds to a renewables obligation certificate by virtue of paragraph (4).

(4)

The sum which corresponds to a renewables obligation certificate (“the buy-out price”) is—

(a)

for the relevant period commencing on 1st April 2009, £37.19; and

(b)

for each obligation period thereafter, the buy-out price for the previous obligation period increased or, as the case may be, decreased by the percentage increase or decrease in the retail prices index over the 12 month period ending on the 31st December in the previous obligation period (the resulting figure being rounded to the nearest penny, with any half of a penny being rounded upwards).