Ofgem continues to object to the renewables obligation
Ofgem response (36 pages, PDF) to the Government's May 2007 consultation on proposed arrangements for "banding" the renewables obligation schemes.
The response largely reiterates Ofgem's January 2007 criticism of the renewables obligation scheme, with more details and graphics. In particular:
- Ofgem argues that the renewables obligation is more expensive for electricity consumers than other ways of reducing carbon dioxide emissions. It proposes to replace it with NFFO-style long-term contracts awarded by competitive tender to individual generators.
- Ofgem highlights the risk that banding will lead to “pressure for changing the bands in the future”, which would “undermine confidence in the scheme and increase uncertainty”.
- Ofgem states that the scheme is complex to administer, and that recovering the administration costs through Ofgem licence fees is not "appropriate".
For further information or advice please contact Franck Latrémolière.
Filed under Electricity, Ofgem, State aid.
