Ofgem is proposing increased costs for administering the Renewables Obligation (RO) for the period April 2018 to March 2019.
The industry regulator forecasts the cost for the administration of the RO for the period will be £4.4 million an increase of 5.4 per cent compared to the cost of administration in 2017-18.
It added the total cost represents just over 0.08 per cent of the estimated value of the scheme and remains “substantially below benchmarks” for the cost of administering other government schemes.
A breakdown published by the regulator shows which areas have increased funding.
IT development costs will increase by £153,364 to £724,927 due to the formation of a project team to scope and gather requirements for a replacement for its register, which builds on the feasibility work carried out last year.
Legal support costs will increase from £148,548 to £208,917, this reflects the “increased support we need from our legal team as we deal with novel application scenarios and complex applications driven by the closure of the scheme to new entrants,” Ofgem said.
Several changes will be implemented to RO legislation over the 2018-19 period. Ofgem will be required to develop new guidance, amend its systems and processes and discharge its duties in the context of new legislation.
A review of the capacity market, which was set up in 2014 to ensure the UK has sufficient security of supply, was published by the Business, Energy and Industrial Strategy (BEIS) Department earlier this month as part of its broader EMR (Electricity Market Reform) process.
The call for evidence document stated that the eligibility framework for the market will have to be tweaked to allow renewables projects, currently supported through the Renewables Obligation, to participate when these subsidies run out in 2027.
From 2027 a fixed price certificate scheme will be introduced with the price of certificates fixed at the 2027 buyout price, plus 10 per cent.