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Units 1-3 Castlebrae Business Centre
Peffer Place
Edinburgh
EH16 4BB

ROC Trading

The Renewables Obligation is a government scheme that provides support for renewable generating stations in the UK.

Renewable Obligation Certificates (ROCs) are issued to operators of renewable generating stations for eligible electricity.

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45.2%

renewable obligation placed on suppliers in GB this year

ROC Trading ROC Trading

How the ROC market works

Under UK legislation suppliers are obligated to prove that they have sourced a percentage of their total electricity supply from renewable sources. This coming year (2018-2019) it is 45.2% in GB and 18.5% in Northern Ireland.

Ofgem (Office of Gas and Electricity Markets) issue ROCs to generators of renewable energy. Energy suppliers (e-on, Scottish Power) buy ROCs in order to meet their obligation before August each year when they are submitted. Some suppliers choose not to buy ROCs and decide to pay a fine instead which is then redistributed amongst those suppliers who did meet their obligation.

The ROC market has strengthened into compliance period sixteen (2017-2018) and seventeen (2018 – 2019). This is because Ofgem has taken into account the incoming grace period applications and had a clearer visibility of the ROC generation entering the market after the closure of the ROC regime in April 2017. Following this, Ofgem set the uplift in ROC obligation levels on suppliers to ensure an appropriate trading market and the return of healthy recycle payments. Note, however that wind speeds and winter weather will continue to influence ROC values in the market place.

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ROC sales

Year after year we continue to increase our ROC sales and this year is no exception, we have predicted that we will reach over 1 million.

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Why we think you'll prefer us to the big companies

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Our ROC trading approach

As one of the largest independent ROC traders in the UK we are able to provide highly competitive prices to generators looking to obtain the best price. We take the time to understand our client needs and work out the best trading arrangement to suit them.

Whether it is on a Buy Out and Recycle, or a Fixed Price we offer flexible trading options and with expert, market-leading advice. We can tailor agreements for our clients across the UK. By acting as an aggregator, we bundle our clients' ROCs and trade them to achieve a higher commercial value.

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We are very pleased with the support that the team have provided over the past 2 years and would have no hesitation in recommending them to other clients/partners.

As well as responding promptly and expertly to our queries, they have a very good understanding and knowledge of energy regulator processes and procedures. This helped us to save time and money.

The Panacea Group
The Panacea Group
Zevon

FAQs

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What are ROCs?

Renewable Obligation Certificates (ROCs) are issued to generators who produce renewable electricity. These ‘green certificates’ are sought after by licensed electricity suppliers who are obligated to source a certain percentage of electricity through accredited renewables, otherwise they must pay a fine, called the ‘buyout price’.

Generators are issued with the ROCs before suppliers can purchase them. The number of ROCs received is calculated based on the amount of electricity generators have produced throughout the year in MWh. Therefore, the number of ROCs available in the market changes annually. Numerous factors can alter renewable generation (and therefore ROCs), such as milder winters. This will subsequently impact the price paid for ROCs within the market; however, Zevon work hard to ensure that we get the best price, even in years when there is a large amount available for suppliers to buy.

How Zevon will make the most of my ROCs?

Zevon are unique in that we will trade your ROCs under contracts to suit you so we can secure optimal returns on your renewable investments. We offer a buy out and recycle deal or a spot price deal depending on what suits the client. 

How are ROCs traded?

ROCs exist within their own market and can be traded at different prices based on the overall ROC market, as it can change year to year based on generation. The price is not constant, however it rarely differs by much more than 5%.

How will my ROCs be traded with Zevon?

1. A spot price gives you budget certainty and improved cash flow.

Spot price is the price given at the point of sale. This option can offer higher returns depending on the ‘market’ at that time. If there are very little ROCs available, their value will increase corresponding to the demand in the market.

2. A percentage share option (Buyout Price/Recycling Value) can be a good choice for generators looking to achieve a better return over the longer term and who are less focused on cash flow certainty.

The buy-out price is set by Ofgem and published on their website annually. This is the value that suppliers choose to pay when they don’t find ROCs on the market These fines are redistributed as ‘recycle payments’ among suppliers who did meet their obligation. Renewable generators can contract for a percentage of this recycle value in their ROC negotiations; as many of our current clients choose to do, they are on a buy out and recycle deal.

How can I make the most of my Renewable Obligation Certificate on the market?

We believe that our unique service generates an excellent return on your ROCs. Working within the ROC market for over 10 years, we have the expertise to analyse and adapt to any changes.

How do suppliers know how many ROCs they need?

A supplier's obligation is calculated by:

Supplier obligation (ROCs) = Total electricity supplied (MWh) x Obligation level (ROCs/MWh)

Therefore, the obligation changes year on year and the price paid for ROCs fluctuates.

How can Zevon help me to understand the ROC market?

We provide expert knowledge and leading market advice which removes the complexity of navigating the ROC market. The ROC market was created when the Renewables Obligation scheme was first introduced and is where your ROCs are traded. By aggregating the ROCs from all our clients, we can act as an aggregator and can deliver desirable quantities to the market whilst focusing on achieving best market price. We provide a service that opens generators (sellers) up to a wide range of suppliers (buyers) who we work with to maximise ROC potential year to year.

Zevon

ROC Trading
Under an EU Directive electricity suppliers are obligated to prove they have sourced a percentage of their total electricity supply from renewable sources. This coming year (2018-2019) it is 45.2% in GB and 18.5% in Northern Ireland.

John Smith, Investment Renewables

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