UK non-commodity charge · Renewables and capacity · Electricity
Renewables Obligation (RO)
Latest published rate, who sets it, and where it is forecast to go.
What Renewables Obligation (RO) is, who sets the rate, what the revenue funds and where it is heading. Rates come from the Purely Energy non-commodity cost data hub; forecasts are our own.
Roughly 8 to 12% of a typical UK business electricity bill
Renewables Obligation (RO): what it is, who charges it, and what it pays for
What it is
The Renewables Obligation (RO) charge in plain English
The largest single NCC after DUoS. Funds the UK’s oldest large-scale renewable energy scheme via Renewables Obligation Certificates (ROCs). RPI-indexed buyout price.
Introduced 2002 (Utilities Act 2000). Closed to new entrants 2017. Runs until ~2037.
Who charges it
The body that sets the rate
DESNZ sets the annual obligation level (ROCs per MWh) by 1 October for the following April; Ofgem administers the scheme and publishes the RPI-indexed buy-out price each February
Unit
p/kWh
Applies to
All electricity supplies
What it pays for
Where the revenue ends up
Onshore/offshore wind, biomass, solar farms built before 2017
Share of typical bill
8 to 12%
Ofgem's annual RO obligation level and buy-out price imply 8 to 12% of a non-domestic electricity bill, recovered through suppliers.
Published rate history
| Financial year | Rate | Year on year | Source |
|---|---|---|---|
| 2020/21 | 2.314p/kWh | - | Published |
| 2021/22 | 2.445p/kWh | +5.7% | Published |
| 2022/23 | 2.564p/kWh | +4.9% | Published |
| 2023/24 | 2.849p/kWh | +11.1% | Published |
| 2024/25 | 2.897p/kWh | +1.7% | Published |
| 2025/26 | 3.306p/kWh | +14.1% | Published |
| 2026/27 | 3.273p/kWh | -1.0% | Ofgem, RO buy-out price 2026 to 2027 |
Forecast trajectory
Forecasts from our non-commodity cost model. P10, P50 and P90 are the 10th, 50th and 90th percentile outcomes; P50 is the central estimate.
| Year | P10 | P50 | P90 | Confidence | Rationale |
|---|---|---|---|---|---|
| 2025-26 | 3.100 | 3.310 | 3.500 | high | Based on current regulatory framework and near-term visibility |
| 2026 | - | 3.420 | - | - | |
| 2026-27 | 3.200 | 3.420 | 3.650 | high | Inflation indexation effects well understood |
| 2027 | - | 3.530 | - | - | |
| 2027-28 | 3.300 | 3.530 | 3.800 | med | Weather variability introduces uncertainty |
| 2028 | - | 3.640 | - | - | |
| 2028-29 | 3.400 | 3.640 | 3.900 | med | Peak year with compound inflation effects |
| 2029 | - | 3.500 | - | - | |
| 2029-30 | 3.200 | 3.500 | 3.800 | med | Inflection point where decline begins |
| 2030 | - | 3.300 | - | - | |
| 2030-31 | 2.900 | 3.300 | 3.700 | low | Certificate expiry effects become significant |
| 2031 | - | 3.101 | - | - | |
| 2031-32 | 0.5500 | 1.450 | 2.100 | low | Major certificate expiry creates wide uncertainty |
| 2032 | - | 3.163 | - | - | |
| 2032-33 | 0.2500 | 1.000 | 1.350 | low | Asset closure uncertainty and regulatory risk |
| 2033 | - | 3.226 | - | - | |
| 2033-34 | 0.1500 | 0.6000 | 0.8500 | low | Placeholder pending clarity on late-life behaviour |
| 2034 | - | 3.291 | - | - | |
| 2034-35 | 0.0500 | 0.2500 | 0.4500 | low | Terminal phase with regulatory intervention risk |
Renewables Obligation (RO) FAQs
What is the Renewables Obligation (RO) charge?
The largest single NCC after DUoS. Funds the UK’s oldest large-scale renewable energy scheme via Renewables Obligation Certificates (ROCs). RPI-indexed buyout price.
Who sets the Renewables Obligation (RO) rate?
The Renewables Obligation (RO) rate is set by DESNZ sets the annual obligation level (ROCs per MWh) by 1 October for the following April; Ofgem administers the scheme and publishes the RPI-indexed buy-out price each February.
What does Renewables Obligation (RO) pay for?
Renewables Obligation (RO) revenue supports Onshore/offshore wind, biomass, solar farms built before 2017.
What is the latest published Renewables Obligation (RO) rate?
For 2026/27, the published Renewables Obligation (RO) rate is 3.273 p/kWh.
What is the Renewables Obligation (RO) forecast?
Our latest forecast for 2027 is 3.530 p/kWh.
Related charges in Renewables and capacity
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Rate data from the Purely Energy non-commodity cost data hub (dh.purelyenergy.co.uk). Published rates come from statutory publications by the body listed above; forecasts are modelled from published guidance and market trends, so treat P50 as a central estimate and use P10/P90 for sensitivity. Primary source