Ofgem orders four suppliers to pay £14.7 million in Renewables Obligations by 31 October 2019
Ofgem is consulting on issuing four suppliers with final orders to compel them to make £14.7 million in outstanding payments they owe to comply with the Renewables Obligations schemes by 31 October 2019.
- Four suppliers missed the original deadline of 1 September 2019 and have not provided Ofgem with adequate assurances that they will pay by the late payment deadline
- If suppliers fail to pay by 31 October, Ofgem could start the process to revoke their licence to supply energy
- Ofgem’s enforcement action sends a strong signal that all suppliers must meet their obligations or face the consequences
The suppliers are:
- Delta Gas and Power Ltd – outstanding amount: £91,937
- Gnergy Ltd – outstanding amount: £637,876
- Robin Hood Energy Ltd – outstanding amount: £9,435,925
- Toto Energy Ltd – outstanding amount: £4,555,880
Under the governments’ 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.
The four suppliers have failed to pay into the buy-out fund or present the required number of ROCs by the 31 August and 1 September 2019 deadlines. They have until 31 October 2019 late payment deadline to make the outstanding payments, plus interest.
Ofgem has engaged with all suppliers that missed the 31 August and 1 September deadlines to seek assurances that they will be in a position to make the necessary payments by the late payment deadline.
The named suppliers failed to provide satisfactory assurances and Ofgem believes that they are likely to breach their obligations.
If the final orders are confirmed later this month, the suppliers will be compelled to pay into the buy-out fund by the 31 October. If they do not, Ofgem could start the process of revoking their licence to supply energy.
Other suppliers missed the 31 August deadline but have given satisfactory assurances to Ofgem on meeting their obligations.
If 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.
“Supplier failure to comply with the schemes undermines the integrity of the schemes and is unacceptable.
“It also adds to the costs of other suppliers who do meet their obligations as they have to absorb or make up any shortfall.
“This enforcement action sends a strong signal that suppliers must meet their obligations, or pay the consequences which could mean losing their licence.”
- The final orders will be consulted on for 21 days before being confirmed (subject to any representations or developments in the meantime). Ofgem hopes that the suppliers in question will now pay the outstanding amounts.
- The named suppliers are, in Ofgem’s view, likely to contravene article 7 of the Renewables Obligation Orders, following their failure to meet the 31 August and 1 September 2019 deadlines and possibly the 31 October 2019 late payment deadline.
- 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.
- 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.
- 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.
For media, contact
Michelle Amos: 020 7901 1881
Media out of hours mobile: 07766 511470 (media calls only)
General enquiries (non-media)
If you are an energy customer looking for help and advice, including complaints about energy firms, please see our Household gas and electricity guide. Citizens Advice also provide a free, impartial helpline service across a range of issues on 03454 040506.
We also regularly share news and post general advice to help consumers get the most out of their energy services via our @Ofgem twitter and Facebook pages.If you have an enquiry or complaint relating to Ofgem’s policies or functions, contact us at email@example.com or on 020 7901 7295.
For all other non-media related enquiries, please visit our Contact us page.
Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.
For energy insights and updates straight to your inbox from Ofgem, please subscribe.
Latest News from
Ofgem protects customers of failed supplier Rutherford Energy Supply Limited16/10/2019 13:15:00
Rutherford Energy Supply Limited (trading as Uttily Energy), an energy supplier with around 280 business customers has ceased to trade.
Ofgem proposes to cut costs of new Hinkley Point grid link16/10/2019 10:15:00
Consumers will save money under Ofgem plans to reduce National Grid’s funding request to connect the new Hinkley Point C nuclear reactor to the grid by £80 million.
Ofgem has published its state of the market report 201903/10/2019 15:15:15
The UK continues to be a global leader in cutting greenhouse gas emissions, according to Ofgem’s annual State of the Market report, but progress is slowing.
Ofgem appoints Jonathan Brearley as chief executive03/10/2019 12:15:00
Ofgem yesterday appointed Jonathan Brearley, its current executive director for systems and networks, as chief executive.
Record numbers of people save money after taking part in Ofgem’s latest collective switch trial30/09/2019 12:15:00
Around 30% of disengaged customers who took part in Ofgem’s latest simplified collective switch trial changed their energy deal.
Vulnerable consumers get more help, but suppliers not doing enough to help manage debt26/09/2019 12:15:00
Suppliers are getting better at helping vulnerable customers manage their energy day to day, Ofgem’s research shows, but are still too slow at helping rising numbers of customers deal with debt.
Ofgem gives go-ahead to Orkney transmission link subject to conditions17/09/2019 10:15:00
Ofgem has given the go-ahead to SSEN’s plan for a 220MW transmission link from Orkney Islands following a consultation, subject to conditions which ensure value for money for all consumers.
Ofgem appoints Utilita Energy to take on customers of Eversmart Energy11/09/2019 12:20:00
Ofgem has appointed Utilita Energy Limited to take on supplying Eversmart Energy Limited’s domestic customers, and the small number of business customers. This follows an appointment process run by Ofgem to get the best deal possible for customers.
Ofgem has published National Grid Electricity System Operator’s technical report11/09/2019 10:15:00
Ofgem yesterday published National Grid Electricity System Operator’s technical report into the recent power cuts of August 9 2019, which was submitted to Ofgem on Friday 6 September (you can access the appendices).