Ofgem orders Delta Gas and Power Ltd to pay £530,000 in unpaid Renewables Obligations payments
Press release
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Company
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Supply and Retail Market
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- Ofgem has issued Delta Gas and Power Ltd (‘Delta’) with a final order compelling the company to pay £530,809.20 in unpaid Renewables Obligations, by the late payment deadline of today, Monday 31 October 2022
- Renewables Obligation schemes support large-scale renewable electricity projects in the UK and place an obligation on UK electricity suppliers to source an increasing proportion of the electricity they supply from renewable sources
- Should Delta fail to pay, Ofgem may take further enforcement action which could include revoking the supplier’s licence
Today, energy regulator Ofgem has issued Delta Gas and Power Ltd with a Final Order, compelling it to pay £530,809.20 plus interest in outstanding Renewables Obligation payments.
Delta is a non-domestic supplier, serving 1,690 business customers in the UK.
Delta failed to pay into the buy-out fund or present the required number of Renewable Obligation Certificates by 31 August and 1 September 2022 respectively, and is now compelled to pay by the late payment deadline of 31 October 2022 with accrued interest. If they do not pay, Ofgem may take further enforcement action including revoking their supply licences.
Renewables Obligations (RO) is a government scheme in England, Scotland, Wales and Northern Ireland, designed to support large-scale renewable electricity projects in the UK. As a key part of the ambition to reach net zero by 2050, the scheme places 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.
It is crucial to protect the integrity of the RO scheme and uphold this where there is non-compliance, to incentivise the uptake of renewable electricity within the UK.
Charles Hargreaves, Deputy Director of Enforcement and Emerging issues at Ofgem said:
"The unprecedented rise in gas prices over the last twelve months only reinforces the need to accelerate the shift away from fossil fuels, strengthening the case for sustainable, home-grown energy. Today’s enforcement action serves as a reminder to suppliers to follow through on compliance with the Renewables Obligation, which ultimately supports consumers, the energy ecosystem and a wider UK 2050 Net Zero ambition."
Suppliers can meet their annual obligation by presenting RO certificates - known as ROCs - making a payment into the buyout fund or a combination of the two.
Once paid, Ofgem will redistribute the money held to suppliers in proportion to the number of ROCs each supplier presented to Ofgem for that compliance period (once scheme administration costs are withdrawn).
Earlier this month, Ofgem consulted on issuing Final Orders for Delta and Logicor Energy Limited (Logicor) for unpaid Renewable Obligation payments. While Logicor has paid its obligation in full, Delta is yet to meet its obligation and has therefore been issued with a Final Order by Ofgem, as the regulator follows through on taking robust action.
Alongside working on short term plans for consumer bills and winter plans, Ofgem is pushing ahead with regulation and enforcement to set the standards for cleaner and affordable energy in the future.
Notes to editors
The amounts owed for each supplier are (excluding interest):
- Following the late payment deadline of 31 October 2022 and internal verification processes, Ofgem will publish a summary of suppliers’ Renewables Obligation payments, late payments and any payments which remain outstanding
- Ofgem is satisfied that Delta is likely to contravene article 7 of the Renewables Obligation Order 2015, following their failure to meet the 31 August and 1 September 2022 deadlines and possibly the 31 October 2022 late payment deadline.
- Provisional and final orders are made with the intention of bringing an end to a breach (or likely breach) of a licence condition or other relevant requirement. A provisional order, rather than a final order, is made to address an urgent need to remedy harm caused by that apparent breach.
- The Renewables Obligation schemes are government schemes in England, Scotland, Wales and Northern Ireland to support large-scale renewable electricity suppliers to source an increasing proportion of the electricity they supply from renewable sources. Ofgem administers the schemes on behalf of government.
- Renewables Obligation Certificates are 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.