What Is A Renewable Obligation Certificate
The Renewable Obligation Certificate is issued to a generator and applies to the electricity that they produce from renewable energy sources.
Each electricity supplier is set an individual target by the Government, and this includes the obligation to provide a minimum percentage of their electricity from renewable sources. If a supplier does not do this, then they must buy surplus ROCs from other organisations or pay a buy-out fee.
Therefore there is a market in ROCs being traded between suppliers, and this can actually help to keep the costs of electricity down for customers as those that focus on renewable generation can keep their costs down by trading their certificates. There is finally the option to remove surplus Renewable Obligation Certificates rather than to trade them, which forces other suppliers to focus more on development of new renewable energy products because it reduces the supply of them to be bought by other companies.
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