npower fined £125,000 for reporting error on Renewables Obligation and Feed-in Tariffs data

Press release

Publication date

  • npower identified and corrected reporting error swiftly
  • Ofgem sends strong message about importance of accurate reporting
  • npower has already voluntarily forfeited Renewable Obligation Certificates (ROCs) and will pay in to the Feed-in Tariff scheme (FITs) levelisation fund to address the impact of their error.

Ofgem has today announced a £125,000 fine for npower, after they were found to have made an error in reporting data relating to the Government’s Feed-in Tariff (FIT) and Renewables Obligation (RO) schemes.

The size of today’s penalty takes into account that npower has already voluntarily forfeited Renewable Obligations Certificates valued at £896,900 (including interest at 5.5% per annum on the amount) and will make a late payment of £63,000 to account for the FIT reporting error. These steps will address the market impact caused by the reporting error.

Under the RO, electricity suppliers are required to obtain a proportion of electricity supplied to British customers from renewable sources. Under the FIT scheme, suppliers are required to provide an incentive to small-scale generators of renewable energy in the form of FITs payments. Ofgem administers these schemes on behalf of the Government and requires suppliers to provide accurate supply data to determine their obligations under the RO and contribution to the FITs payments fund based on market share.

The reporting errors were due to incorrect information being used by npower to calculate the amount of electricity supplied to customers. This resulted in npower underreporting these amounts by 0.08% in 2010-11 and by 0.28% in 2011-12. npower identified and reported the error to Ofgem, and also took steps to prevent this from reoccurring. The error was not repeated in 2012/13.

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Notes to editors

1. The penalty notice relating to the investigation is available on the investigations section of our website.

2. The Feed-in Tariff (FIT) scheme is a government programme designed to promote the uptake of a range of small-scale renewable and low-carbon electricity generation technologies. All licensed electricity suppliers are required to make payments into the Ofgem administered ‘Levelisation Fund’, based on their market share of Great Britain’s electricity supply market and any FIT payments made to accredited installations under the FIT scheme. The fund is then redistributed to FIT licensees (electricity suppliers) that have made more payments to accredited installations than they would be required to by their market share contribution.

3. The government’s Renewables Obligation (RO) scheme is the main support mechanism for renewable electricity projects in the UK. Renewables Obligation Certificates (ROCs) are green 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 obligation. Where suppliers do not present a sufficient number of ROCs to meet their obligation, they must pay an equivalent amount into a buy-out fund.

4. Ofgem issued a letter in March setting out that we will substantially increase the level of penalties we impose. This decision has been taken to ensure regulatory compliance is given sufficient focus within businesses and to deliver strong deterrence. This change will come into effect where evidence of rule breaking comes to our attention on or after 1 June.

5. Ofgem is the Office of the Gas and Electricity Markets, which supports the Gas and Electricity Markets Authority, the regulator of the gas and electricity industries in Great Britain. The Authority’s powers and duties are largely provided for in statute, principally the Gas Act 1986, the Electricity Act 1989, the Utilities Act 2000, the Competition Act 1998, the Enterprise Act 2002, the Energy Act 2000

For further press information contact:

Lisa O’Brien 0207 901 7426

Dafydd Wyn 020 3263 9943

Felicity Beverley 0207 901 3858

Out of hours media contact number 07766 511470