Renewables Obligation Late Payment Distribution 2022 - 2023

Reports, plans and updates

Publication date

Licence type

Electricity Supply Licence

Scheme name

RO

We redistributed the 2022-23 Renewable Obligation (RO) late payment fund on 5 December 2023. We paid a total of £7,170,917.00 to suppliers who presented Renewables Obligation Certificates (ROCs) this year. Suppliers received £6.81 per ROC presented after the redistribution of the buy-out fund. From the redistribution of the late payment fund, they have received an extra £0.07 per ROC. This means that the final recycle value for 2022-23 is £6.88.

Details of the late payments we received from suppliers (including interest) and the amounts we redistributed for each RO scheme are in Table 1 below (the amount redistributed also includes the remainder from the last late payment redistribution):

Table 1
Obligation Late Payments Made by Suppliers Late Payments Redistributed
England and Wales £6,802,874.21 £6,802,910.00
Scotland £368,003.39 £368,007.00
Northern Ireland £0.00 £0.00
Total £7,170,877.60 £7,170,917.00

We redistributed late payments to the suppliers on the same basis as the buy-out fund, i.e. in line with the proportion of the total ROCs they presented across the three schemes.

As with the buy-out fund, the amounts we redistributed are rounded down to the nearest pound.

Suppliers have until 1 September to present ROCs to us or until 31 August to make buy-out payments to meet their obligations. Suppliers who have not met their obligations in full by this date must make late payments by 31 October. Late payments incur a daily interest penalty, at an annualised rate of 5% + Bank of England base rate (so 10.25% this year). This is specified in RO legislation. 

Four supplier groups across 6 obligations failed to meet their obligation by the deadline of 1 September, as outlined in Table 2:

Table 2
Supplier Obligation outstanding (England & Wales) Obligation outstanding (Scotland) Obligation outstanding (Northern Ireland)
Marble Power Ltd £2,667,000.00 £0.00 £0.00
BES Commercial Electricity Ltd £4,091,801.52 £365,030.64 £0.00
Crown Gas and Power2 Ltd £264.40 £0.00 £0.00
UK Energy Incubator Hub Ltd £90,160.40 £9,359.76 £0.00

Of the four supplier groups across 6 obligations who failed to discharge their obligation by the 31 August and 1 September deadlines, 4 obligations were fully discharged by the late payment deadline of 31 October. The remaining 2 obligations were not met in full:

Table 3
Supplier Obligation Amount owed (exc. interest) as of 31 Oct
UK Energy Incubator Hub Ltd RO £90,160.40
UK Energy Incubator Hub Ltd ROS £9,359.76

The total shortfall is determined by reference to article 72 of the Renewables Obligation Order 2015 and article 48 of the Renewables Obligation (Scotland) Order 2009.

The total shortfall amount across all RO schemes is £99,520.16 (excluding interest). This is distributed across the schemes, as follows:

  • RO: £90,160.40
  • ROS: £9,359.76
  • NIRO: £0.00

As a relevant shortfall has not been reached, mutualisation has not been triggered for the 2022-23 scheme year.

The supplier who failed to comply by the 31 October late payment deadline has had their licence revoked.

We are unable to pursue enforcement action against suppliers which have ceased trading and had their licence revoked. We will seek to recover outstanding payments due from such suppliers through the organisations’ administrators where appropriate.

Through our work on these issues, Ofgem seeks to secure the best outcomes for consumers and the wider energy market.

Contact: REcompliance@ofgem.gov.uk

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