If you generate renewable electricity in the UK, the Renewables Obligation (RO) has probably been part of your income for years. It's the government scheme that's paid renewable generators since 2002. ROC bandings determine how many certificates generators receive for each megawatt hour (MWh) of electricity they generate. The higher the banding, the more ROCs they receive, and the more they can earn from them. Suppliers buy these certificates to meet their own renewable obligations.

For a lot of sites, especially landfill gas, wind, hydro and anaerobic digestion, that's added up to steady, predictable income for a long time.

That income has a fixed end date, and it depends on when your site was accredited:

• Accredited on or before 25 June 2008: your ROC income stops on 31 March 2027, regardless of your exact accreditation date.

• Accredited after that: you get 20 years of support from your own accreditation date, capped at 31 March 2037.

Landfill gas and hydro sites were among the earliest to accredit under RO, so a lot of them fall into the first group and hit their end date first. But it's your own accreditation date that decides which of the two rules above applies to you, not your technology. You can check your expiry date with our calculator here.

Whatever your date, the question is the same: what replaces that income once it stops.

What that income has actually been doing

For most sites, ROC income isn't a bonus on top of running the business – it's part of what makes running the business work.

It covered the maintenance you didn't want to skip, keeping an ageing piece of kit going a bit longer. It kept the right people on site rather than cutting hours. It's been part of how you've kept the lights on, literally or otherwise.

Once accreditation ends, that income stops. The costs it was covering don't, so something else has to cover them instead.

One option worth knowing about: P442

P442 is an initiative that connects eligible renewable generation to one or more businesses’ energy use. Businesses pay non-commodity costs (NCCs) on their electricity, charges on their bill that fund other government energy schemes. When your generation is paired to a business under P442, some of those NCCs are reduced. That reduction is where your income comes from: you receive a share of the value it creates, while the business pays less.

There is a cap of 2.5 MWh per half-hourly settlement period. This is the maximum volume that can be allocated across all businesses for a given generator. These limits apply to your entire corporate group.

Ofgem's regulation is absolute: sites can't stack payments from both RO accreditation and licensed exempt supply. While your site holds RO accreditation, it isn't eligible for P442. As it stands, no alternative to RO has been announced and there’s no clear signal that there are plans for one. P442 is available right now, meaning it could represent something concrete on the other side of your accreditation date.

For eligible generators, tem's current P442 rate runs to £30+ per MWh depending on generation type and volume, paid monthly and fixed for the term of the contract. It won't match ROC income pound for pound, and it's worth being cautious of anyone who implies it will. For some ROC generators we’ve spoken with, P442 is an income stream that will determine if they’ll continue running their site.

How to evaluate any P442 proposal (quick checklist)

Before consenting, ask for clear answers to these:

1. Who is the ESNA and what is being verified?

   There should be an official Exempt Supply Notification Agent (ESNA) process in the loop. (ESNA verification supports the scheme, but it is not a substitute for having proper contracts and consents in place).

   
   

2. What do I get paid per MWh and what drives that price?

   Ask for the actual price mechanics and how frequently they can change. Ask how frequently you’ll be paid, and understand what percentage of your generation is matched to businesses. Knowing how the pie gets allocated to all involved is important upfront.

   
   

3. What visibility will I have?

   Ask which businesses your generation will be allocated to and how you’ll be notified when those allocations change. You should be able to see how changes in output or demand are handled. If you can't see how the scheme is performing, you're contributing generation without transparency. Ask for it.

   
   

4. What happens when conditions change?

   Get a concrete explanation of what happens when:

   • Output drops sharply

   • A business customer's demand shifts

   • A site joins or leaves

5. What liability am I taking on if exemption is lost or a cap is breached?

   Supplying beyond the exempt thresholds without a licence is a criminal offence, and Ofgem can act on that independently of your agreement with a supplier. Your obligation is to monitor your own and your corporate group's supply volumes to remain within the 2.5 MWh cap per half-hourly settlement period. You must notify your supplier in writing, with evidence, as soon as you're aware of anything that could affect your status.

The answer should not be "we'll sort it out." It should be an operational process.

P442 and tem

Any eligible generator can apply for P442, as long as their supplier offers it (and not all do). The exemption itself doesn't change from one supplier to another, the same non-commodity costs are reduced, whoever you go through. What changes is how much of that saving actually reaches you, in what shape, and how much you can see of the process behind it.

At tem, P442 is administered under the name RED Plus.

Every RED Plus arrangement runs through an approved Exempt Supply Notification Agent (ESNA). Our ESNA collects the meter readings, allocates volumes as efficiently as possible, and applies its own eligibility checks before sending them on to the regulator. This system allows for regular updates and corrections, if necessary. tem checks ROC status to confirm eligibility and rely on generators to provide us with accurate information.

You get to see which businesses you're linked to, what's exempt, and how much of the saving comes back to you. Some other suppliers keep that opaque: they pass the exemption to the business, then pay you wholesale plus a small premium. You generated the power that created the saving, but you can't see how much of it they kept.

tem matches 100% of your eligible generation to businesses. RED Plus pays a fixed £ per MWh, agreed upfront and set for the length of your contract, not a share of a pool that can move around. You know the number, so you can put it straight into a cash flow forecast rather than guess at it.

It's also paid monthly rather than quarterly or annually. Instead of one lump sum showing up every few months, you get a predictable amount landing every month. It appears on your generation invoice each month as your RED Plus Benefit, alongside what you're paid for the power itself.

Conditions change, and RED Plus is built to keep up without you having to chase. If a linked business's demand shifts, or a site joins or leaves the arrangement, tem reviews eligibility, updates the allocation, and tells you what changed, with time to flag any concern before it takes effect.

If you already partner with tem, P442 adds to that relationship rather than replacing any part of it. Your price is competitive own its own. P442 is an additional benefit stacked on top. It's the same principle tem applies everywhere else: cutting out the costs intermediary layers would otherwise add, so more of what your generation earns reaches you.

tem has completed over 3,500 P442 applications on behalf of our customers to date. Bryn Group, an anaerobic digestion plant in south Wales, is one example: they've been paid £123,000 through RED Plus so far, which they've put toward a paddle washer to clean packaging waste. Less contamination means a lighter load to send to the Cardiff Energy from Waste burner for disposal. A lighter load means a lower bill.

Where to start

P442 won't be the full answer for every site and it's worth understanding what it does and doesn't cover before treating it as one. It replaces some of what RO paid for, not all of it, and it only applies once your RO accreditation has ended. You can check your indicative earnings through our calculator here.

If you’d like to learn more about what P442 could mean for your site, that's a conversation worth having with us. Get in touch at hello@tem.energy- we can talk you through what applies to you specifically, and what doesn't.