Energy firms which have not sourced enough electricity from renewable sources will have to pay more, according to energy regulator Ofgem. In the Renewables Obligation compliance period of 2009-10, Ofgem expects energy firms to have to pay £37.29 per megawatt hour (MWh), to confirmed by legislation due in April. This represents an increase from £35.76 per MWh they have to pay currently if they cannot provide sufficient Renewable Obligation Certificates (ROC) for the energy they produce. The amount of electricity the companies supply from renewables will also have to rise from the present 9.1 per cent to 9.7 per cent. Ofgem also said that the Renewable Obligation Order 2009, which will set the so-called buy-out rate, will also establish banded subsidies, so that some renewable technologies are granted more support by being worth more in ROCs. “It is expected that the new legislation, which is planned to take effect from April 1st, 2009, will set the buy-out price and mutualisation ceilings for 2009/10, It is also expected that these will then be adjusted by Ofgem in each subsequent year to reflect changes in the Retail Prices Index.” The government has committed to generating 15 per cent of energy from renewable sources by 2020.
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