The Renewables Obligation has been instrumental in promoting large-scale renewable electricity projects in the UK since the early 2000s.
While it is no longer accepting new applications, existing accredited generators continue to receive support until their accreditation expires.
The government is now considering transitioning to the Fixed Price Certificate model by 2027 to provide stakeholders with certainty in costs and revenues as older generating stations approach retirement from the scheme.
The plan would allow older wind and renewable projects supported by the Renewables Obligation scheme to opt for long-term, fixed price contracts.
Under the current scheme, generators trade their power on the market and receive a fixed amount of subsidy, but consumers are exposed to fluctuating gas prices.
By replacing the market power price, which is tied to gas prices, with a fixed price contract, the government seeks to ensure stable and predictable costs for maintaining these renewable energy sources.
This, in turn, would shield consumers from sudden price spikes due to expensive gas.