High volumes expected in Tuesday's UK ROC auction: E-Power

Over 100,000 UK Renewable Obligation Certificates (ROCs) are expected to be auctioned in Tuesday's electronic auction of the green certificates after last month's sale achieved a record high price, Stuart Stephens of auction organizer E-Power told S&P Global Platts Monday.

In last month's auction ROC prices climbed over GBP55 ($71) per certificate as more certainty came into the market ahead of closure of Compliance Period 18 (CP18) for 2019-2020, Stephens said. A technology-dependent number of ROCs are issued for each megawatt-hour of eligible renewable power generated.

"The final CP18 ROC price including recycle value is being forecast by Cornwall Insight at GBP58.29 for CP18, putting the recycle value at GBP9.51 per ROC," Stephens said.

CP18, which runs between April 1, 2019 to March 31, 2020, has a ROC buy-out price set by regulator Ofgem of GBP48.78 per ROC.

This is the price suppliers must pay at the end of the period if they are short of meeting the Renewables Obligation, which for CP18 equates to 48.4% of supply. Those fees are then recycled to other suppliers according to ROCs produced.

The auctions tend to track a little below forecasts as a final value (buyout plus recycle) does not become clear until towards the end of the year, Stephens said.

The first auction for CP18 certificates was held last July, with prices around GBP53/ROC. "It hovered around that level until January, when it suddenly leapt up over GBP55 to the highest price we've seen since the auctions started in 2003," he said.

Meanwhile E-Power is to hold its next REGO auction March 11, having sold over 500,000 of the UK guarantees of origin to 10 buyers in a January 30 sale.

The auction returned an average price of 15 pence for biomass REGOs and 26 pence for hydro, solar and wind technologies.

"It is still an immature market and we aim to have quarterly auctions, but this time we're going earlier due to demand," he said.

Finally some 52 power purchase agreements were traded in a January auction of renewable electricity contracts, followed by a further 21 in February, in total amounting to around 300 MW of power.

In total some 32 GW of capacity have been contracted under the Renewables Obligation, including 12.5 GW of onshore wind, 6.6 GW of offshore wind and 7.3 GW solar PV. The remainder comprises biomass and waste (3.9 GW), landfill gas (1 GW) and hydro/tidal/wave (700 MW).

The scheme was closed for all technologies in March 2017 and replaced by Contracts for Difference. RO-accredited generators receive the support for 20 years.