Ofgem unable to pursue 10 failed suppliers owing £17.8m in RO

A total of 10 energy suppliers owe more than £17.8 million in renewables obligation (RO) payments but will not be pursued by Ofgem because they have either ceased trading or gone into administration.

Under the RO scheme, suppliers have until 1 September to present certificates to Ofgem or make buy-out payments to meet their obligations.

Suppliers who have not met their obligations in full must make late payments by 31 October. Late payments incur a daily interest penalty, at an annualised rate of 5 per cent + the Bank of England base rate ( so 5.1 per cent this year).

In an announcement today (9 December) the energy regulator revealed that more than £33 million is to be mutualised this year down from 2019’s £97.5 million total.

It is the third time in as many years that mutualisation has occurred. Suppliers who discharged part or all of their obligation will be required to make quarterly payments to make up the shortfall, in proportion to their obligation.

In total, 33 suppliers across 54 obligations failed to pay by September, while 13 had continued to fail to meet their full obligations by the late payment deadline:

However of these 13, Ofgem says it is unable to take enforcement action against the majority of them as these suppliers ceased trading before obligations became due. These include:

• Breeze Energy
• Effortless Energy
• Electraphase Energy
• Eversmart Energy
• Gnergy Energy
• Rutherford Energy
• Snowdrop Energy
• Solarplicity Energy
• Tonik Energy
• Toto Energy

The regulator did say it would seek to recover outstanding payments through the organisations’ administrators “where appropriate”.

In October Ofgem revealed it had issued three suppliers with final orders over their failure to make a total of £15 million in RO and Feed-in Tariff (FIT) payments.

The three in question are Robin Hood Energy, Nabuh and Symbio.

Their outstanding amounts were:

Symbio paid shortly after the late payment deadline and Ofgem revoked the order. It is still listed as owing money, as the amount to be mutualised is calculated by reference to the total shortfall as of 31 October. Payments made after the late payment deadline will be redistributed at a later date.

Last month Utility Week revealed that the government is preparing to raise the threshold for mutualisation under the RO after a review deemed the current arrangements not fit for purpose.

In addition, the Department for Business, Energy and Industrial Strategy (BEIS) says it is considering changes to the way the mutualisation amount is determined in England and Wales in order to lessen its impact on suppliers.