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Renewables obligation

Since 2002, the Government has placed an obligation on electricity suppliers to meet an increasing proportion of their electricity sales from renewable sources. This Renewables Obligation is 9.1% in 2008/09.

In July 2006, the Government published its Energy Review and underlined its support for the development of renewable energy by setting an aspiration of 20% of UK electricity being generated from renewable sources by 2020. Government also recognise that if this target is to be achieved, the next generation of renewable technologies will require additional financial support.

In order to provide the necessary support, the Government has introduced technology bands into the Renewables Obligation so that developing technologies (such as offshore wind) receive more funding than established technologies. As a major offshore wind developer, Centrica has played a significant role in helping to develop these modifications and supports the implementation of technology bands.

The EU has confirmed a legally binding plan to ensure that 20% of all energy will be from renewable sources by 2020. Within this framework, the UK target will be 15% of all energy. As the potential for renewable heat and renewable transport is limited in the UK, it is currently anticipated that around 30% of electricity will need to be generated from renewable sources.

In December 2007 the Government announced plans for a major expansion of offshore wind development, opening up the seas off the UK coastline for up to 33GW of wind energy. In September 2008, The Crown Estate launched a competitive tender process to allow interested parties the right to bid to become exclusive “development partners” and develop wind farms in nine zones around the UK coast. Following this process in January 2010 the successful bidders were confirmed as the exclusive development partners by The Crown Estate, with Centrica being awarded the Irish Sea Zone. Successful delivery of Round 3 projects will take total UK capacity to 33GW, enough to provide every home in the UK with zero carbon electricity.