24 May 2009

The ROC Wealth Transfer Mechanism

The Whitelee wind farm in Renfrewshire was officially switched on yesterday (20th May, 2009) by First Minister Alex Salmond, reports The Daily Record.

This will result in a massive and continuing transfer of wealth from poor people to the owners of the wind farm.

Wikipedia explains how this happens in, "The Renewables Obligation".

"Through the Renewables Obligation, British electricity suppliers are now required by law to provide a proportion of their sales from renewable sources such as wind power or pay a penalty fee. The supplier then receives a Renewables Obligation Certificate (ROC) for each MWh of electricity they have purchased."

The 'law' mentioned in the wikipedia article is here - The Renewables Obligation Order 2009 (No. 785).

It is anticipated that the Whitelee site will generate 846,216 MWh per annum of electricity.

Using the 2007/08 buy-out price of £34.30 per MWh as the price of each ROC we have a wealth transfer of -

£34.30 x 846,216 = £ 29,025,208.8.

The source of this wealth is the consumers of electricity in the UK.

So, if your electricity bills are high; have a look around and see how many wind turbines you can see. Not only on hill tops but inside factory sites and ask yourself whether or not you would be able to generate sufficient capital to build your own turbine and hence get a slice of this particular cake.

Lastly, ask yourself whether or not you think this is simply a mechanism for transferring wealth from poor people to rich people.


  1. I agree the green subsidies are fully corrupt.

    But what do you think are the true costs of burning fossils? If internalised like in a true free market?

    Even if there are no external costs and damage:

    who benefits from using fossils
    who pays for them
    and is anyone receiving a windfall from them

    And then, how do the windfalls and corruption from that compare with the green ones.

    Finally what would you do about that?

  2. Hi Robin

    I get impression that the questions you are asking are rhetorical; if so, could you elaborate?

    I'm not sure if you're alluding to the wealth of, eg, the Bowes-Lyons or making an environmental point.