Ofgem could issue final orders to seven energy suppliers over late Renewables Obligations Payments

What are Renewable Obligations?

The Renewables Obligation (RO) scheme is aimed at all licensed energy suppliers in the UK to encourage energy suppliers in the UK to generate electricity from renewable sources.

Energy suppliers have to demonstrate that these obligations have been met by submitting Renewable Obligation Certificates (ROCs) to Ofgem. If a supplier does not have the needed number of ROCS, then it will have to make a payment to the regulator’s buyout fund.

It is this failure to make payments that has spurred Ofgem to consult on issuing final orders to the following energy suppliers- Co-operative Energy, Flow Energy, MA Energy, Nabuh Energy, Symbio Energy, Robin Hood Energy and Tonik Energy.

The seven suppliers will have to cough £33.86 million in outstanding payments in order to become compliant with the Renewable Obligations scheme.

Two of the suppliers, Robin Hood Energy and Tonik Energy also owe £158,814.47 for the Feed-in-Tariff levelisation scheme.

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. They now owe a total amount of £148,534.

The deadline for energy suppliers to present their ROC information was September 1^st but the seven being proposed for final orders had failed to provide Ofgem assurances that they would be able to make their payments by the deadline.

The final deadline for payments is the end of October with those failing to pay in September having to stump up the cash they owe plus interest.

Read more: Ofgem Renewable Obligation Certificates

24 energy suppliers missed the initial deadline

This year 24 energy suppliers missed the September deadline but have since paid what they owe in full or have given Ofgem assurances that the payments will be made.

Every year since the scheme's launch there have been a few energy suppliers that miss the deadline, but with 2020 being such a challenging year as a result of the Covid-19 pandemic more suppliers than usual struggled to hit it.

If the seven energy suppliers fail to pay by the October deadline they will be issued with a final order and could even have their supplier license revoked.

Read more: Renewables Obligations mutualisation risks are growing

Ros are a big deal

“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,” said Cathryn Scoot, Ofgem’s director of enforcement and emerging issues. 

Further Reading

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