Ofgem Proposes Orders To Pay £34 Million In Renewables Obligations And Feed-In Tariff Payments

Ofgem is consulting on issuing seven suppliers with final orders to compel them to make £33,861,450.83 in outstanding payments owed to comply with the Renewable Obligations (RO) scheme and pay £158,814.47 in Feed-in Tariff (FIT) levelization payments.  

The seven suppliers are Co-Operative Energy Limited; Flow Energy Limited; MA Energy Limited; Nabuh Energy Limited; Robin Hood Energy Limited; Symbio Energy Limited; and Tonik Energy Limited.

ROCs

Under the governments’ RO 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. Suppliers who fail to comply in full by 31 August/1 September must make a late payment, including applicable interest, by 31 October.

Missed deadlines

Twenty-four active suppliers missed the deadlines, but 17 of these have either since paid the amount owed

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

Twenty-four active suppliers missed the deadlines, but 17 of these have either since paid the amount owed or given satisfactory assurances to Ofgem on meeting their obligations.

The remaining seven suppliers have failed to fully discharge their obligation by either presenting the required number of ROCs by the deadlines or paying the full buyout payment, and have since failed to provide adequate assurances they would make the payment by the late payment deadline.

pay into buy-out

If the final orders are confirmed later, the seven suppliers will be compelled to pay into the buy-out fund by 31 October 2020. If they do not pay Ofgem could start the process of revoking their licenses to supply energy.

In addition to not meeting the RO deadlines, Co-Operative Energy Limited, Flow Energy Limited, and Symbio Energy Limited also missed the deadline for the Quarter 1 2018-19 RO/ ROS mutualization payment and have not paid in full. The total outstanding payments amount to £148,534.

FIT scheme

Suppliers that have failed to pay by the levelisation deadline are in breach of the Feed-in Tariffs Order

Separately, Robin Hood Energy Limited and Tonik Energy Limited failed to make their Year 10 annual levelization payment for the government’s FIT scheme, which is administered by Ofgem. The outstanding amount for these two suppliers is £158,814.47.

This scheme provides payments to owners of small-scale renewable generators and is funded through levies on suppliers. Suppliers that have failed to pay by the levelisation deadline are in breach of the Feed-in Tariffs Order.

cleaner electricity

Cathryn Scott, Ofgem’s Director of Enforcement and Emerging Issues, said, “The Renewables Obligations and Feed-in Tariff schemes provide important support for renewable generation, increasing the uptake of cleaner electricity and helping the country on its path to net zero emissions. Supplier failure to comply with these schemes and make the payments due undermines the integrity of the schemes and is unacceptable. This enforcement action sends a strong signal that suppliers must meet their obligations.” 

If suppliers fail to pay, Ofgem could take further enforcement action. In all instances, Ofgem will seek to secure the best outcomes for consumers and the wider energy market.