Some 153,664 UK Renewable Obligation Certificates were sold Wednesday in the Non Fossil Purchasing Agency's monthly e-ROC auction at an average price of GBP41.93 ($59.21) per ROC, the agency said Thursday.
The price was down 26 pence on the agency's February auction, when 178,443 ROCs sold at GBP42.19/ROC.
The NFPA characterized this as a smaller fall "than might be suggested by current market conditions of heavy oversupply for Compliance Period 14 (April 1, 2015--March 31, 2016), which may also feed through to CP15 (April 1, 2016--March 31, 2017)."
ROC market forecasters have pointed to a 3.5 million increase in certificate supply from biomass generator Drax, and a 3 million-3.5 million ROC oversupply from offshore wind generation.
The UK's offshore wind farms posted record load factors between November and February, the agency said. In December alone, UK offshore wind recorded a load factor of 68%.
A larger number of bidders than usual took part in the March e-ROC auction, with 10 suppliers placing close to 600 bids.
While volumes were down a little on February, they were up by almost 100,000 ROCs on March 2014, when 61,186 certificates were sold at an average price of GBP42.54/ROC.
Current ROC values are below the buyout price of GBP44.33/ROC set by regulator Ofgem for several reasons.
Firstly, there is a large overhang of certificates from the previous compliance period, with surplus ROCs banked into this year because of previous oversupply.
This serves to reduce the 10% headroom buffer set by the Department of Energy and Climate Change for the current compliance period.
The headroom is designed to soak up oversupply and so support ROC values.
The buffer is also under pressure from lower electricity demand than that projected by DECC; a rush of onshore wind and solar project completion ahead of subsidy cuts; and, as noted, unexpectedly high wind and biomass production.
On the plus side for ROC generators, DECC has improved its wind load factor methodology for 2017 and the obligation itself is to increase from 29% of supply for 2015-16 to 34.8% of supply for 2016/2017.
The next NFPA e-ROC auction is scheduled for April 27.
ROCs are issued to eligible producers of renewable energy in the UK.
Electricity suppliers have to source a percentage of their supply with ROC-accredited power. For the current 2015-16 CP14 period the obligation is 0.29 ROC/MW, or 29% of supply.
