Green Gas Support Scheme (GGSS) Annual Report - 2022-23
Reports, plans and updates
Publication date
Scheme name
GGSS
This is the second Green Gas Support Scheme (GGSS) annual report. As part of our statutory responsibilities administering the GGSS and associated Green Gas Levy (GGL) we have produced this report to provide an update on activity between 1 April 2022 and 31 March 2023 (Scheme Year 2).
The Executive Summary is provided here, and the full report is published at the bottom of this page.
Executive Summary
Ofgem runs a range of environmental and social schemes on behalf of government and for the devolved administrations. Together, these are worth over £9 billion each year. Our schemes fall into three main categories: renewable electricity schemes, renewable heat schemes, and energy efficiency and social schemes.
To meet ambitious government targets to reach net zero carbon emissions, we need to transition to use clean energy to heat British homes and businesses. To help achieve this the GGSS opened to applicants in England, Scotland and Wales on 30 November 2021 and provides financial support to eligible new anaerobic digestion biomethane plants for the injection of lower carbon ‘green gas’ into the gas grid. In addition to helping decarbonise, the GGSS also helps promote a circular economy by making use of our domestic and industrial food waste to heat British homes and businesses. The GGSS is funded by a levy placed on all licensed fossil fuel gas suppliers in Great Britain, known as the GGL.
As scheme administrator, Ofgem ensures the scheme is operated efficiently, including the registration and processing of applications for the GGSS, the calculation of levy payments due by gas suppliers to fund the scheme, and reporting on scheme activity.
Applications for registration
Since the start of the scheme to the end of March 2023, we received 22 initial applications for registration. Of these, ten have been issued with a tariff guarantee and one successfully completed the registration process during Scheme Year 2. Securing a tariff guarantee is a compulsory stage of applying to the GGSS. Tariff guarantees are designed to provide increased certainty to developers and investors, by allowing a tariff rate to be secured before an installation is commissioned and fully registered on the scheme.
Registered scheme participants
One periodic support payment of £104,860.84 was made during Scheme Year 2 to the registered participant. This was based on 246,292 m3 of biomethane injected into the grid. The volume of biomethane injected is enough to generate 1,903,101 kWhth. This is sufficient to heat approximately 159 typical UK homes for a year, or heat 697,000 hot baths.
The first levy payments were made by suppliers in May 2022. In total, by the end of Scheme Year 2 £53.95 million had been collected. It should be noted that suppliers of at least 95% green gas are exempted from paying the levy and where there are unused funds, they are carried over resulting in the levy rate in subsequent years being adjusted.
The number of obligated suppliers can vary quarter to quarter dependent on licence revocation and/or approval of gas supply licenses. Over the course of Scheme Year 2, the number fell from 94 in Quarter 1 (April - June 2022), to 88 in Quarter 4 (January - March 2023). One supplier was determined to be provisionally exempt for the year.
As part of the government’s Energy Price Guarantee, there was a temporary removal of green levies from household bills from 1 October 2022. The GGL was still collected from obligated suppliers, but the costs were not passed onto consumers through their energy bills. Instead, the costs were met by Government through general taxation.
As part of our role administering the GGL, we work to ensure that gas suppliers comply with their obligations. We take incidents of non-compliance extremely seriously and where suppliers fail to meet their obligations, we publish this information in the Supplier Performance Report (SPR) and in the GGL default register. Furthermore, for more serious incidents we may take other enforcement action.
We expect suppliers to be proactive in their engagement with the scheme. They should use the guidance available to co-ordinate their activities and ensure that they comply in full with their obligations, including meeting scheme deadlines. We expect suppliers to do this without unnecessary engagement from us and will have a low tolerance for those that fail to do this.
There were seven incidents of statutory non-compliance recorded on the default register and SPR in Scheme Year 2. Three of these were for the late provision of credit cover. The remaining four statutory incidents involved late GGL levy payments. It should be noted that any missed payments were subsequently made shortly after the deadline. This meant that there was no shortfall in the levy fund during Scheme Year 2.
In addition to the statutory non-compliances, there were three incidents of administrative non-compliance recorded in Scheme Year 2. All incidents of administrative non-compliance were due to payments being made by suppliers into the wrong bank account. These did not warrant an entry on the default register but have been included on the SPR.
Please note: For those wishing to look at the data used in the report in more detail, a spreadsheet with this information is published below.
