Watchdog issues final order for energy suppliers to pay out £34m

A string of energy suppliers, including companies in Warwick, Sheffield and Nottingham, have been ordered to pay out £34m to Ofgem in order to meet their renewables obligations.

The regulator is consulting on issuing seven suppliers including Co-op Energy in Warwick; Tonik in Warwick; Nabuh is Sheffield and Robin Hood in Nottingham with final orders to make outstanding payments owed to comply with the Renewable Obligations (RO) scheme and Feed-in Tariff scheme levelisation payments.

The RO scheme places an obligation on UK electricity suppliers to source an increasing proportion of the electricity they supply from renewable sources.

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 says it 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 in their 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.

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.”