New Renewables Obligation: Sustainability Audit – Guidance for Operators and Auditors

Ofgem issued guidance on how to comply with the annual sustainability audit report requirements under the renewable obligations in England, Wales and Scotland for operators and auditors on 1 April 2014.

The Renewables Obligation (RO), the Renewables Obligation (Scotland) (ROS) and the Northern Ireland Renewables Obligation (NIRO) are designed to incentivise large-scale renewable electricity generation in the UK.

The Northern Ireland Renewables Obligation (Amendment) Order 2014 has not yet come into force. Until this happens, generating stations in Northern Ireland should continue to refer to the 2013 version of the Sustainability Audit guidance (bioliquids only).

From April 2014, generating stations with a TIC of 1MW and above, using solid biomass or biogas, will also have to submit an annual sustainability audit report.  The guidance provides information on the key requirements for the submission of the annual sustainability audit reports.

The RO requires the annual sustainability audit report to be prepared to an adequate standard, being ISAE 3000 or equivalent. Background information to International Standard on Assurance Engagements (ISAE) 3000 is provided by the document. The RO also sets out some specific points which must also be addressed as part of the audit process which are also described in the document.

The audit will require the operator of a generating station and their auditor to go through a number of steps, working together throughout the verification process. An overview and examples of the actions that may be undertaken as part of the audit are described by the document. So are the data, processes and systems used by the operator to produce the sustainability information reported to Ofgem that will be subject to verification.

It is the responsibility of the operator of the generating station to provide Ofgem with an annual sustainability audit report.

This report must meet the requirements specified by the Orders and be submitted to Ofgem by the relevant deadline:

• if using bioliquid fuel only, the deadline is 31 May immediately after the end of the obligation period which it covers
• if using solid biomass or biogas fuel(s) the deadline is 30 June immediately after the end of the obligation period which it covers
• where an operator is making use of bioliquid and biogas or solid biomass fuels, they should provide a single audit report to Ofgem covering all fuels used by 31 May immediately following the obligation period, reflecting the bioliquid deadline.

Where the annual sustainability audit report is not provided by the relevant deadline or is provided but is incomplete or unsatisfactory, Ofgem will postpone the issue of the Renewables Obligation Certificate (ROC), up to the number of ROCs associated with the relevant obligation period. The issue of these ROCs will remain postponed until the annual report is provided (or revised as required) and accepted by Ofgem in accordance with the requirements of the legislation (see Chapter 7 of the Ofgem guidance on sustainability criteria).

The document has been specifically created for the Renewables Obligation scheme and is guidance only, and therefore not intended to be a legal guide.

For further information please contact Andrew Riley on 020 7112 8300 or email andrew.riley@assureuk.co.uk.