The Climate Change Levy is a tax on UK business energy use, charged at the time of supply.
Following the closure of the RO scheme, Contracts for Difference were introduced as long-term contracts that encourage investment in new, low-carbon generation.
The Feed-in Tariff scheme is a government subsidy designed to promote smaller scale renewable technologies. It is actually paid via the licensed electricity suppliers, requiring suppliers to make tariff payments on both generation and export of renewable and low carbon electricity. Generators over 30kW, who are half-hourly metered, can opt out of the government export tariff and get a better market price via the e-POWER auction.
Levy Exemption Certificates are issued by Ofgem to generators who produce renewable energy. Suppliers pay generators for their LECs, providing them with the evidence to demonstrate to HMRC that electricity supplied to UK business customers is CCL exempt.
The Power Purchase Agreement is a contract between the generator and the supplier that outlines how much generators will be paid for any power they generate that is not used locally but exported to the national grid.
Used to certify the renewable nature of the electricity being generated, Renewable Energy Certificates (RECs) are issued for every megawatt (MWh) hour of renewable electricity generated by power generators. Companies can purchase RECs to support claims of the use of renewable energy and lowering emissions, thus validating their Environmental, Social and Governance credentials. Power suppliers can also purchase them to validate claims of renewable energy supply.
Renewable Energy Guarantees of Origin is a certificate issued by Ofgem, certifying that the electricity has been produced from renewable energy sources, so that consumers can make informed choices on their energy supply. One REGO is issued for every megawatt hour (MWh) of gross renewable electricity. Once issued, REGOs can be traded with or without the electricity to which it was issued. This allows suppliers to state that a certain proportion of their electricity has been generated from renewable sources, even if the actual electricity is from a mix of sources, but with the assurance to consumers that the electricity purchased has been matched with renewable generation.
A Renewable Gas Guarantees of Origin is a certificate issued for each kWh injected into the grid that has been produced from renewable sources such as biogas. They capture how, when and where gas has been produced, similar to REGO certificates but for gas. Just as with REGOs, they can be traded separately from the sale of gas itself.
The Renewables Obligation scheme provides incentives for large-scale renewable electricity in the UK. It requires licensed UK electricity suppliers to source a specified proportion of the electricity they provide to customers from eligible renewable sources. The RO closed to new generators on 31 March 2017, although electricity generations that were accredited under the RO will continue to receive its full lifetime of support (20 years) until the scheme closes in 2037.
A Renewable Gas Guarantees of Origin is a certificate issued for each kWh injected into the grid that has been produced from renewable sources such as biogas. They capture how, when and where gas has been produced, similar to REGO certificates but for gas. Just as with REGOs, they can be traded separately from the sale of gas itself.
Renewables Obligation Certificates (part of the Renewables Obligation scheme) are issued to accredited generators for the eligible renewable electricity they generate. For every megawatt-hour (MWh) of eligible renewable energy generated, a generator receives a ROC certificate. Generators can trade ROCs with other parties or of course buy and sell through the e-ROC auction. ROCs are then ultimately used by energy suppliers to demonstrate that they have met their regulator obligation for renewable energy. If suppliers do not have sufficient ROCs, they have to pay a buyout price (penalty).
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