Ofgem consults on issuing final orders to five suppliers over £7 million in late Renewables Obligations payments
Press release
- Publication date
- Industry sector
- Supply and Retail Market
Ofgem is consulting on issuing five suppliers with final orders to compel them to make £7 million in outstanding payments to comply with the Renewable Obligations (RO) scheme.
The suppliers are Ampoweruk, Whoop Energy, Goto Energy, Home Energy Trading and Colorado Energy.
Under the Government’s RO scheme, 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 accrued interest, by 31 October.
Ofgem has engaged with all suppliers that missed the 31 August and 1 September RO deadlines to seek assurances that they will be able to make the necessary payments by the late payment deadline.
The five suppliers have failed to fully discharge their obligation by either presenting the required number of ROCs by the deadlines, or paying the full buy out payment, and have since failed to provide adequate assurances they will make the payment by the late payment deadline.
If the final orders are confirmed later this month, the five suppliers will be compelled to pay into the buy-out fund by 31 October 2021. If they do not pay, Ofgem could start the process of revoking their licences to supply energy.
In all instances Ofgem will seek to secure the best outcomes for consumers and the wider energy market.
Notes to editors
- The final orders will be consulted on for 21 days before being made (subject to any representations or developments in the meantime).
- The amounts owed for each supplier are:
- 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 2021 deadlines and possibly the 31 October 2021 late payment deadline.
- Where suppliers have given adequate assurances, Ofgem will keep the situation under close review and will not hesitate to intervene if this becomes necessary.
- The Renewables Obligation schemes are government schemes in England, Scotland, Wales and Northern Ireland 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 in full or in part will be required to make up the shortfall.
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