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UK regulator reveals power companies owe almost £63m to renewable energy obligation pots

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UK regulator reveals power companies owe almost £63m to renewable energy obligation pots



Four electricity suppliers have been named by Ofgem for missing payment deadlines for penalties prompted by their failure to meet renewable energy buying obligations. A separate fund for small-scale generators, paid for by energy suppliers, also has a financial shortfall.

Britain’s electricity and natural gas market regulator Ofgem this week announced it is investigating two energy companies for failing to make payments into the fund set up to penalise suppliers who fail to meet their obligations to purchase renewable power.

The regulator is investigating power supply companies Economy Energy and Spark Energy which, together with URE Energy and Eversmart, account for a £58.6 million shortfall in the Renewable Obligation buy-out fund.

Energy companies which fail to hit targets to source a mandated percentage of their electricity from renewable generation must pay into the fund in proportion to any shortfall in their clean energy output, and Economy Energy – which gives no indication of where it is based on its website – and Scottish provider Spark, went under investigation on Wednesday for missing the deadline for payments into last year’s fund.

A spokesperson for Ofgem told pv magazine details of how much of the overall shortfall was attributable to each of the four suppliers would be made public after the audit of last year’s fund was completed.

URE Energy, based in Gerrards Cross, west of London, and Manchester’s Eversmart have also missed payment deadlines for last year, and have been ordered to pay the amounts they owe the fund on a monthly payment plan running until the end of March. The payment arrangement for those two companies suggests they have already had contact with Ofgem over the late payment issue, but the spokesperson would only confirm each matter is dealt with “on a case by case basis”.

Big Six and others will have to make up shortfall

In a press statement on Wednesday about the buy-out fund shortfall, Ofgem also revealed £4.2 million is missing from the periodic levelisation fund it administers, into which suppliers pay into a central pot that then provides payments for small-scale renewable energy generators.

Ofgem said the missing cash related to the second quarter of year nine of the U.K. government’s FIT scheme, without defining which three-month period it concerned, and without specifying which companies were responsible for non-payment.

British bill payers are unlikely to shed any tears upon learning that, if Ofgem fails to collect the money owed the funds, “mutualisation” kicks in. In other words, all the other power companies – including the ‘Big Six’ whose monopoly position in the U.K. so angers voters – who met their obligations, will have to make up the difference.

pv magazine has contacted the four power companies in question to seek an explanation but had received no response at the time of publication, apart from an automated response from Eversmart’s customer service team indicating it may take up to three days to reply – thereby illustrating just why the British public gets so infuriated with its power suppliers.



Source PV Magazine

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