Ofgem proposes orders to pay £34 million in Renewables Obligations and Feed-in Tariff payments
Press release
Publication date
Scheme name
- FIT
- RO
- Seven suppliers owe £34 million in Renewables Obligations and Feed-in Tariff scheme levelisation payments
- The suppliers have not provided Ofgem with adequate assurances that they will make their Renewables Obligations payments by the late payment deadline
- If suppliers fail to pay the Renewable Obligations and Feed-in Tariff levelisation payments due, Ofgem could take further enforcement action which could include revoking a supplier’s licence
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) levelisation 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.
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.
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 buy out payment, and have since failed to provide adequate assurances they would make the payment by the late payment deadline.
If the final orders are confirmed later this month, 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 licences 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 mutualisation payment and have not paid in full. The total outstanding payments amount to £148,534.
Separately, Robin Hood Energy Limited and Tonik Energy Limited failed to make their Year 10 annual levelisation payment for the government’s the FIT scheme, which is administered by Ofgem. This 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.
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.
The seven suppliers and outstanding amounts are:
Notes to editors
- The final orders will be consulted on for 21 days before being confirmed (subject to any representations or developments in the meantime).
- 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 2020 deadlines and possibly the 31 October 2020 late payment deadline, as well as SLC 33 for non-payment of FITs
- The Renewables Obligation schemes are government schemes in England and Scotland 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 will be required to make up the shortfall.
- The Feed-in Tariffs scheme is a government programme designed to promote the uptake of smaller scale renewable and low-carbon electricity generation. It requires participating electricity suppliers to make payments on both generation and export from eligible installations. Ofgem administers the scheme on behalf of government.
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