Renewables Obligation (Scotland) Order 2009 - inflation indexation changes: business and regulatory impact assessment

Introduction

The Renewables Obligation (RO) has incentivised UK renewable electricity generation since 2002 through a system of tradable green certificates called “Renewables Obligation Certificates” (ROCs).

Three separate but complementary Renewables Obligation schemes cover the UK. The RO and the Renewables Obligation Scotland (ROS) were introduced in 2002, and the Northern Ireland Renewables Obligation (NIRO) was introduced in 2005. The UK government is responsible for the legislation for the RO scheme for England and Wales. The Scottish Government and the Northern Ireland Executive are responsible for the legislation for their respective schemes. All schemes are administered by Ofgem.

Subject to respective parliamentary procedures, the UK Government, Scottish Government and Northern Ireland Executive are changing how the costs of the RO schemes are adjusted for inflation from 1 April 2026. A consultation^[1] was launched on 31 October 2025 seeking views on two policy options for transitioning from the Retail Price Index (RPI) to the Consumer Price Index (CPI). Both options aim to deliver a more proportionate approach to inflation indexation, reduce costs to consumers, and align with broader government and regulatory policy.

A partial Business and Regulatory Impact Assessment (BRIA)^[2] was published alongside this consultation due to the potential for either policy to have financial impacts on domestic and non-domestic electricity bill payers and renewable electricity generators in Scotland.

This final BRIA describes the anticipated impact in Scotland of the policy chosen to transition ROS from RPI to CPI indexed inflation following the outcome of the consultation process.