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Ofgem issues Gnergy Ltd final order for unpaid Renewables Obligations bill

Ofgem has issued a final order to Gnergy Ltd to compel the supplier to make the outstanding payment of £673,876.62 plus interest to comply with the Renewables Obligation schemes by 31 October 2019. 

  • Gnergy Ltd missed the original deadline to meet its Renewable Obligations and has not provided Ofgem with adequate assurances that it will pay by the late payment deadline by 31 October
  • Of the three other late payers for whom we issued consultations to make final orders, Robin Hood Energy Ltd and Delta Gas and Power Ltd have paid and Toto Energy Ltd has ceased to trade
  • Ofgem may take further enforcement action against other late payers who have previously provided adequate assurance  if they fail to pay by the 31 October deadline

Under the government’s Renewables Obligation schemes, suppliers have to demonstrate they have sourced enough electricity from renewable sources to meet their obligation by presenting Renewables Obligation Certificates (ROCs) to Ofgem by 1 September.

If suppliers do not have enough ROCs to meet their obligation, they must make up the shortfall by paying into a buy-out fund administered by Ofgem by 31 August.

Gnergy Ltd failed to pay into the buy-out fund or present the required number of ROCs by the 31 August and 1 September 2019 deadlines. It now has until the 31 October 2019 late payment deadline to make the outstanding payments, plus interest.

This month, Ofgem also consulted on issuing Delta Gas and Power Ltd, Robin Hood Energy Ltd and Toto Energy Ltd with final orders for their missed Renewable Obligations payment by the original deadline.

Toto Energy Ltd has since ceased to trade and any outstanding Renewables Obligations will represent a shortfall in scheme funds.

Delta Gas and Power Ltd has since made its £91,937 payment plus interest and Robin Hood Energy Ltd has paid £9,435,925 plus interest in full and neither will be issued with a final order.

Ofgem has engaged with all other suppliers that missed the 31 August and 1 September deadlines and has received satisfactory assurances that they will be in a position to make the necessary payments by the late payment deadline.

If any of these suppliers fail to comply Ofgem is ready to take appropriate enforcement action against them.

Mary Starks, executive director of consumers and markets yesterday said:

“The Renewables Obligation schemes provide important support to renewable electricity generators and play an important role in Great Britain’s journey to a net zero emission economy by 2050.

“Following our intervention, we have successfully received payment from two of the four suppliers by the 31 October deadline.

“If any supplier undermines the scheme by failing to comply by the late payment deadline, we will take strong enforcement action that could lead to them having their licence revoked.”

Following the late payment deadline, Ofgem will publish a summary of suppliers’ Renewables Obligation payments, late payments and missed payments.

Should there be a shortfall in scheme funds at the late payment deadline, this will be addressed in line with the Renewables Obligation Orders. Shortfalls in the late payment fund for the Renewables Obligation scheme will trigger mutualisation if the relevant threshold is met.

Notes to Editors

  1. Gnergy Ltd, in Ofgem’s view, is likely to contravene article 7 of the Renewables Obligation Orders 2015 and article 5 of the Renewables Obligation (Scotland) Order 2009, following its failure to meet the 31 August and 1 September 2019 deadlines and possibly the 31 October 2019 late payment deadline. 
  2. The Renewables Obligation schemes are government schemes to support large-scale renewable electricity projects in the UK. They place an obligation on UK electricity suppliers to source an increasing proportion of the electricity they supply from renewable sources. Ofgem administers the schemes on behalf of government.
  3. Renewable Obligation Certificates (ROCs) are 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 obligations.
  4. Shortfalls in the late payment fund for the Renewables Obligation scheme will trigger mutualisation if the relevant threshold (£15.4 million for England and Wales, and £1.54 million for Scotland) is met. This means that suppliers who have complied with their obligations will be required to make up the shortfall.

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Channel website: https://www.ofgem.gov.uk/

Original article link: https://www.ofgem.gov.uk/publications-and-updates/ofgem-issues-gnergy-ltd-final-order-unpaid-renewables-obligations-bill

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