Ofgem rebukes 20 suppliers for overstating renewable credentials

Ofgem has named 20 suppliers who overstated the proportion of renewable electricity supplied to customers in their 2019/20 Fuel Mix Disclosures (FMDs).

Among those listed by the regulator include large multinational power companies Orsted and Vattenfall, as well as smaller suppliers such as Outfox the Market and business retailer Yu Energy. Six of the 20 have ultimately ceased trading.

Ofgem estimates around 152 million renewable energy guarantees of origin (REGO) and guarantees of origin (GoO) certificates were used for the 2019/20 FMD.

However, following a market-wide review of suppliers’ FMD statements during this time, the regulator found retailers reported to have supplied a total of 2,151,820MWh more electricity from renewable sources than was supported by their evidence.

This was due to the same number of REGOs and GoOs not being held by suppliers on 1 July 2020, the date by which they need to be held in order to be redeemed for FMD purposes.

Common issues found by Ofgem include errors in the calculation of the total amount of electricity supplied to customers and administrative errors which resulted in REGO certificates not being held in the correct account on the Renewables and CHP Register.

Another common issue was suppliers who did not intend to purchase certificates incorrectly using the UK Average Fuel Mix figures, instead of Residual Fuel Mix figures, as their FMD statement.

Those who held insufficient certificates, including suppliers who failed to apply a line loss factor accounting for electricity lost within the transmission and distribution network, include:

• Eneco Energy Trade BV
• ESB Energy
• Gazprom Energy
• Green Supplier Limited
• HUB Energy (previously trading as Gulf)
• Orsted
• Outfox the Market
• People’s Energy
• Pozitive Energy
• Sinq Power (trading as Clear Business)
• Symbio Energy
• Vattenfall Energy Trading GMbH
• Yü Energy

Additionally Ofgem has named suppliers who incorrectly used the UK Average Fuel Mix for their FMD statement:

• Ampower
• Business Power and Gas Energy
• Eco Green Management Ltd (trading as Yorkshire Gas and Power)
• Maxen Power
• Northumbria Energy
• Square1 Energy
• Utility Point

Following the review 11 suppliers identified to have held insufficient certificates agreed to surrender REGOs equivalent to their FMD discrepancy, as a proportionate reflection of their non-compliance.

Furthermore 18 suppliers agreed to pay a total of £90,000 into the Energy Industry Voluntary Redress Scheme.

A consumer “scandal”

Good Energy is a renewable energy supplier which has persistently campaigned against greenwashing in the  sector.

Responding to the news the company’s chief executive, Nigel Pocklington, said: “Greenwashed ‘certificated-backed’ energy tariffs are already a consumer scandal. The revelation that suppliers are not even reaching the low bar of buying cheap certificates to back their claims is nothing short of outrageous.

“Hundreds of thousands of home and business owners have tried to do their bit to be greener, and have been taken advantage of.

“The energy market is not short of challenges right now, but that only makes it more important that we protect customers. That these suppliers can get away with a voluntary £5,000 fine and a slap on the wrist is nowhere near good enough.”