UK green certificate prices exceed GBP51 in e-ROC monthly auction

London — UK renewable obligation certificate (ROC) prices rose above GBP51.00 ($70.25) in a March 23 electronic auction, organizer E-Power confirmed to S&P Global Platts.

Over 3,000 bids in the sale saw prices increase for the fourth month in a row in the online auctions, with volumes sold exceeding 100,000 ROCs, E-Power's Commercial Director Stuart Stephens told Platts.

"It's getting closer to the end of the current compliance period and suppliers can see what their demand will be for the financial year [to March 31], so that's starting to push ROC prices up a bit," Stephens said.

For the 2020/2021 ROC compliance period, power suppliers have to produce 0.471 ROCs for every megawatt they supply in mainland UK, and 0.185 ROCS per MWh supplied in Northern Ireland.

Those failing to do this have to pay a regulated buy-out price of GBP50.05 per ROC, missing out in the process on a share of proceeds from the mechanism's recycle fund.

Those that comply, however, are looking at outturn ROC values "of around GBP52.50 or a little more according to market analysts, so it makes sense to pick up ROCs at under GBP52 in the auction," Stephens said.

He did not think reduced wind generation had played a material role in rising certificate prices.

"Yes we've saw power prices spike at times in 2021 on reduced renewable production, meaning less ROC issuance, but lower electricity demand in the current financial year due to Covid would have more than offset that," he said.

A ROC represents one megawatt-hour of eligible green electricity under the UK's Renewables Obligation support mechanism. The value of the certificate accrues to the operator in addition to the wholesale power price.

While the RO has closed to new projects, the obligation on suppliers to buy certificates continues.

For the upcoming 2021/2022 RO compliance period, power suppliers will have to produce 0.492 ROCs per MWh supplied in Great Britain, and 0.194 ROCS per MWh supplied in Northern Ireland.

Suppliers have to meet their obligations by Sept. 1 each year by either presenting ROCs to regulator Ofgem, or making the buy-out payment.