Suppliers missed RO deadline leaving £163m shortfall

A total of 36 energy retailers missed the deadlines to meet their Renewables Obligation (RO), leaving a £163 million shortfall in the buyout funds.

Under the RO scheme suppliers are obliged to present their obligations by 1 September, with those who miss the deadline having to make late payments by 31 October. Any payments still owed after this point and above the relevant thresholds of £63.7 million for England and Wales and £1.54 million for Scotland will be mutualised.

Ofgem has now confirmed that as of 1 September £163 million was owed after 36 retailers failed to meet the deadline. The regulator has however so far only formally pursued one supplier over its failure to pay and has ordered Delta Gas and Power to make payments of £530,000 by 31 October.

This is in stark contrast to last year when it ordered seven retailers to make almost £20 million in payments. Following this, mutualisation was triggered for the fourth consecutive year after 28 suppliers, the vast majority of which had already exited the market, left more than £218 million in RO payments to be picked up by the rest of the industry.

The figure constituted the largest ever amount to be mutualised under the scheme. It is more than six times larger than the 2019/20 period and more than double the previous record amount of £97.5 million set in 2018/19.

Utility Week has asked Ofgem whether any suppliers owed money after the October deadline but received no response at the time of publication.

The total obligation for the 2021/22 year was 127.8 million ROCs. Suppliers presented more than 109 million ROCs in total, and more than £776 million in buyout payments.

Ofgem said it has redistributed almost £770 million in buyout fund payments to suppliers which presented ROCs towards their obligations.