npower fined £125,000 for reporting error on Renewables Obligation and Feed-in Tariffs data
19 May 2014 12:34 PM
- npower identified and
corrected reporting error swiftly
- Ofgem sends strong
message about importance of accurate reporting
- npower has already
voluntarily forfeited Renewable Obligation Certificates (ROCs) and will pay in
to the Feed-in Tariff scheme (FITs) levelisation fund to address the impact of
their error.
Ofgem has today announced a
£125,000 fine for npower, after they were found to have made an error in
reporting data relating to the Government’s Feed-in Tariff (FIT) and
Renewables Obligation (RO) schemes.
The size of today’s
penalty takes into account that npower has already voluntarily forfeited
Renewable Obligations Certificates valued at £896,900 (including interest
at 5.5% per annum on the amount) and will make a late payment of £63,000
to account for the FIT reporting error. These steps will address the market
impact caused by the reporting error.
Under the RO, electricity
suppliers are required to obtain a proportion of electricity supplied to
British customers from renewable sources. Under the FIT scheme, suppliers are
required to provide an incentive to small-scale generators of renewable energy
in the form of FITs payments. Ofgem administers these schemes on behalf of the
Government and requires suppliers to provide accurate supply data to determine
their obligations under the RO and contribution to the FITs payments fund based
on market share.
The reporting errors were due to
incorrect information being used by npower to calculate the amount of
electricity supplied to customers. This resulted in npower underreporting these
amounts by 0.08% in 2010-11 and by 0.28% in 2011-12. npower identified and
reported the error to Ofgem, and also took steps to prevent this from
reoccurring. The error was not repeated in 2012/13.
-Ends-
Notes to
editors
1. The penalty
notice relating to the investigation is available on the
investigations section of our website.
2. The Feed-in Tariff (FIT)
scheme is a government programme designed to promote the uptake of a range of
small-scale renewable and low-carbon electricity generation technologies. All
licensed electricity suppliers are required to make payments into the Ofgem
administered ‘Levelisation Fund’, based on their market share of
Great Britain’s electricity supply market and any FIT payments made to
accredited installations under the FIT scheme. The fund is then redistributed
to FIT licensees (electricity suppliers) that have made more payments to
accredited installations than they would be required to by their market share
contribution.
3. The government’s
Renewables Obligation (RO) scheme is the main support mechanism for renewable
electricity projects in the UK. Renewables Obligation Certificates (ROCs) are
green certificates issued to operators of accredited renewable generating
stations for the eligible renewable electricity they generate. Operators can
trade ROCs with other parties. ROCs are ultimately used by suppliers to
demonstrate that they have met their obligation. Where suppliers do not present
a sufficient number of ROCs to meet their obligation, they must pay an
equivalent amount into a buy-out fund.
4. Ofgem issued a letter in
March setting out that we will substantially increase the level of penalties we
impose. This decision has been taken to ensure regulatory compliance is given
sufficient focus within businesses and to deliver strong deterrence. This
change will come into effect where evidence of rule breaking comes to our
attention on or after 1 June.
5. Ofgem is the Office of the
Gas and Electricity Markets, which supports the Gas and Electricity Markets
Authority, the regulator of the gas and electricity industries in Great
Britain. The Authority’s powers and duties are largely provided for in
statute, principally the Gas Act 1986, the Electricity Act 1989, the Utilities
Act 2000, the Competition Act 1998, the Enterprise Act 2002, the Energy
Act 2000
For further press information
contact:
Lisa O’Brien 0207 901
7426
Dafydd Wyn 020 3263 9943
Felicity Beverley 0207 901 3858
Out of hours media contact number 07766 511470