Green Network Energy and Simplicity Energy cease trading, Symbio Energy to be fined £100,000 for late Renewables payments

SoLR process

Between the two companies' customers numbered 410,000 with Green Network Energy's 360,000 and Simplicity's 50,000. The Supplier of Last Resort (SoLR) process has been triggered by Ofgem who will now seek a new energy supplier for those impacted.

Under the SoLR process, the effected consumers' energy supply will be protected, and any outstanding credit balances of domestic customers will be protected. A new supplier will contact all consumer affected by the closures.

"Green Network Energy and Simplicity Energy customers do not need to worry, as under our safety net we'll make sure your energy supplies are secure and domestic customers' credit balances are protected.

"Ofgem will now choose a new supplier for you and whilst we are doing this, our advice is to wait until we appoint a new supplier and do not switch in the meantime. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your new tariff," said Phillipa Pickford, Director of Retail at Ofgem.

Also read: What is a Supplier of Last Resort?

Symbio Energy to be fined

Further highlighting the challenges energy suppliers face, Ofgem has proposed to fine Symbio Energy £100,000, reduced to £85,000 for making repeated late payments into the Renewables Obligations and Feed-in Tariff (FIT) schemes.

Symbio was under investigation at the start of 2021 for its failure to make payments. The regulator has said it is planning to issue fines against the supplier for missing an obligatory deadline.

As well as missing that deadline, Symbio also failed to meet three other payment deadlines over four months, including two FIT quarterly levelisation payments and one RO mutualisation payment. All suppliers have to pay to cover any shortfalls from the previous year.

Ofgem accuses Symbio's management of being fully aware that the company was breaching the rules by missing their payment deadlines and took no action to prevent the rule-breaking from taking place.

Also read: Ofgem opens investigation into Symbio Energy over late Renewables Obligation and Feed-in Tariff payments

What is the Renewables Obligation?

The Renewables Obligation scheme was introduced to encourage UK energy suppliers to generate electricity from renewable sources.

To show that these obligations have been met, energy suppliers must submit Renewable Obligation Certificates (ROCs) to Ofgem. If suppliers don't have the necessary ROCs, they need to make a payment into a buy-out fund.

Each licensed electricity supplier is required on an annual basis to either purchase and redeem a requisite number of Ofgem Renewable Obligation Certificates as calculated based on their annual electricity sales total or to pay an equivalent amount into a buy-out fund (the proceeds of which are then distributed on a pro-rata basis to those suppliers that have presented ROC's) or a combination of these two options.

Making an Example

Since Ofgem's investigation began, Symbio has paid the £1.2 million it owed.

The regulator is making an example of Symbio. It stated that while many energy suppliers have been impacted financially by the Covid-19 pandemic, many have worked hard to ensure they make their payments on time.

Schemes like the Renewables Obligation and Feed-in Tariff provide vital support to renewable electricity generators and are crucial to building a green energy system, helping Britain hit Government net-zero carbon emissions targets.

"Suppliers that do not make payments on time undermine the integrity of these schemes, gain unfairly financially, and ultimately leave consumers and other suppliers to pick up the tab.

"This proposed fine sends a strong message that Ofgem will not tolerate suppliers who do not meet their obligations around paying into these schemes and that growth cannot be at the expense of meeting regulatory obligations," said Cathryn Scott, Ofgem's Director of Enforcement and Emerging Issues.

Further Reading

Number of Consumers switching Energy Supplier fell 6.5% in 2020

Ofgem wants a new independent body to lead the way to Net Zero

Small Energy Suppliers beat the big companies, and Octopus Energy is dethroned from top spot of the Which? Energy companies’ satisfaction survey

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