Government proposes a fixed price for Renewables Obligation certificates from 2028-29 at the earliest

The market in certificates that pays thousands of older renewable power stations could be wound up from 2028. The Department for Energy Security and Net Zero has proposed replacing tradable Renewables Obligation Certificates (ROCs) with fixed-price certificates, starting no sooner than the 2028-29 scheme year, in a consultation published on Tuesday.

The Renewables Obligation covers more than 30% of UK electricity generation. Over 26,600 accredited stations, with 35GW of capacity, were in the scheme between April 2024 and March 2025, mostly onshore and offshore wind, biomass and solar. It closed to new projects in 2017, but some generators remain in it until 2037.

The certificate market today

Generators receive certificates from Ofgem for the power they produce and sell them to suppliers, traders and intermediaries, usually under power purchase agreements. Suppliers must hand Ofgem a set number of certificates for each megawatt hour they supply, or pay a buy-out price instead. That price is £69.34 for 2026-27. Buy-out money is then shared out among suppliers who presented certificates, and that share forms part of what a certificate is worth. The cost ends up on electricity bills.

As stations reach the end of their support, fewer certificates will be issued, and the department says the market could become thinner and more volatile. Analysis it commissioned suggests serious price swings are unlikely before the early to mid-2030s, and many respondents to a 2023 call for evidence said the market was working well and a change now would be premature. The department is still proposing to move before then, citing its concerns about future volatility and the chance to reduce the scheme's overall cost to consumers.

The fixed-price design

Under the preferred design, certificates would no longer be traded. A central counterparty would buy every certificate from generators at a fixed price and charge suppliers a levy to cover the cost, collected quarterly in advance. Consumers would still pay through their monthly electricity bills.

The first year's price would start from the buy-out price in the final year of the current scheme and rise each year with CPI, using the April to March figure. The open question is whether generators should get a percentage uplift on top, to replace the extra value they now get from recycled buy-out payments.

The size of that uplift largely decides whether bill payers come out ahead. The department's illustrative modelling, in 2024 prices and covering 2028-29 to 2036-37, found:

• a 10% uplift could raise total scheme costs by around £1.9bn
• a 2% uplift could lower them by around £0.9bn, but with less support for generators overall
• an uplift of around 4% could reduce costs while keeping generators' income broadly where it is now

The department said these figures carry significant uncertainty and are not preferred options.

Generators would be guaranteed payment for every valid certificate. Suppliers would no longer need to buy certificates at all, which the department said would reduce the risk of suppliers defaulting on payments.

The consultation closes at 11:59pm on 12 January 2027. The plan sits alongside other measures already announced on Renewables Obligation costs, including Exchequer funding for 75% of the scheme's domestic costs in Great Britain for three years.