1. CCL, ROCs & Other Acronyms
AL GORE I

2. Aspects Covered Background – climate change CCL and ECAs
Renewables Obligation the RO
NFFO, ROCs, LECs, REGOs
CRC – the Carbon Reduction Commitment

3. Climate Change

4. Global CO2 emissions

5. How to tackle climate change
Reduce man-made CO2 emissions
Reduce fossil fuel burn
Improve efficiency
Encourage renewable forms of energy
Incentives/Penalties

6. International Efforts
UN Climate Change Conferences
1997 Kyoto Protocol – binding targets
Bali, Poznan, Copenhagen
‘Road maps’
UK policy and objectives

8. UK GHG Reduction Policies
1989 Energy Act - Privatised the ESI - NFFO
2000 Climate Change Programme – CCL
2002 NETA and ROCs
Climate Change Act and Energy Act 2008
Energy Act 2011 – The Green Deal

9. CCL - Climate Change Levy April 2001
Applied to energy supplied to businesses
Charged On ‘taxable commodities’:
Electricity natural gas and other hydrocarbon gases, coal and coke
Non-taxable commodities:
Oil, road fuel gas, heat and steam
Scheme administered by HMRC

10. Levels of CCL Adjusted by annual inflation 2011 rates:
Electricity p/kWh
Natural gas p/kWh
Liquid gases p/kg
Coal and coke p/kg

11. Reliefs from CCL Domestic consumers and charities are exempt
Good Quality CHP
Renewable electricity generation
Up to 80% relief for ‘sector agreements’
Revenue is recycled – 0.3% reduction in NI

12. ECA – Enhanced Capital Allowances April 2001
ECA Introduced at same time as CCL
Energy Technology List on the DECC website
List is managed by the Carbon Trust for Govt.
Effectively a tax relief
Company can write off whole of capital cost in first year

14. Non-Fossil Fuel Obligation 1990 NFFO
1989 Energy Act – mainly supported nuclear!
Electricity Suppliers obliged to buy tranches
Funded by the Fossil Fuel Levy per kWhe
Emphasis shifted to renewable energies
Replaced by Renewables Obligation in 2001

15. Renewables Obligation and ROCs
NETA - new electricity trading arrangements
Electricity Suppliers obliged to buy increasing proportions of their supplies from ‘renewables’
Intially 3% - rise to 15.4% in 2015/6
Scheme administered by Ofgem who:
1 Accredit ‘renewable generators’
2 Set a ‘Buy-out Price’
3 Issue ROCS and collect/distribute the Buy-out Fund

16. ROC banding – Introduced 2009
Distinguishes between ‘maturity’ of technologies:
Established Band
Reference Band
Post-demonstration - 1.5
Emerging

17. Renewable Obligation Certificates
Awarded to the renewable generator
ROCs carry a value separate from the electricity supplied
Generator can sell direct to a Supplier or put them up for auction
Also receive LECs and REGOs

19. Selling ROCs Generator can sell direct or put up for auction
Auctions conducted monthly by the NFPA
October 2011 prices have reached £46/MWh

20. Suppliers – Meeting the Obligation
A Supplier must meet its obligation each year:
Obligation = Sales (MWh) x ROCs/MWh
Ofgem calculates ROCs/MWh – for 2011/2

21. Suppliers – Meeting the Obligation
Supplier can meet its obligation by:
Buying total ROCs obligation (direct/auction)
Paying a ‘buy-out price’ for its obligation
A mixture of 1 and 2 above
Buy-out price fixed by Ofgem - £38.69/MWH for 2011

22. ROCs - The Buy-out Fund & Recycling
Ofgem collects monies paid for Buy-outs
Size of the Buy-out Fund :
(Total UK Obligation-ROCs presented) x Buy-out price
Recycle Value:
Value = Buy-out Fund/No. of ROCs presented
Recycling payments made only to those who Suppliers who presented ROCs

23. ROCs and Buy-out Recycling

24. CRC - The Carbon Reduction Commitment
Applies to large organisations not covered by Climate Change Agreements
More than 6,000 MWH through ½ hourly meters
Carbon footprint
Original plan to recycle monies
Now a simple ‘tax’ at £12 per tonne of CO2