The Renewables Obligation scheme supports the generation of renewable electricity and it is paid for by electricity suppliers. When suppliers fail to pay their share of the costs, the value of the debt is recovered from compliant suppliers in a process called mutualisation, which in the UK is currently triggered when the debt equals or exceeds a £15.4m threshold. The order amends the Renewables Obligation Order 2015 so that the mutualisation threshold is now 1% of the forecast annual cost of the scheme for the obligation year in question.
As already noted, this instrument amends the
2015 Order which is the present legal basis for the Renewables Obligation (RO)
scheme in England and Wales.
There are separate RO schemes in Scotland under the Renewables Obligation
(Scotland) Order 2009, and in Northern Ireland under the Renewables Obligation
Order (Northern Ireland) 2009. These complementary schemes effectively create a
UK-wide RO. Responsibility for policy as it relates to the operation of the RO in
Scotland and Northern Ireland is devolved to the Scottish Government and Northern
Ireland Assembly respectively. Mutualisation does not apply in Northern Ireland.
