More than 40 energy suppliers failed to meet their total renewables obligations (RO) by the deadlines, resulting in a shortfall of £206 million.
The regulator has already named several suppliers which failed to pay their RO on time and issued provisional orders against Nabuh Energy and Breeze Energy over the £872,000 and £486,000 in late payments which they owe respectively, while Gnergy was slapped with a final order over its shortfall of £674,000.
Nabuh has insisted that its bill will be paid in full today (8 November).
Ofgem yesterday confirmed that mutualisation will be triggered, after Utility Week revealed failed energy suppliers had left behind an unpaid RO bill of £72 million for 2018/19.
A total of 127 million renewables obligation certificates were issued over the 2018/19 period.
- 114,579,143 ROCs in England and Wales
- 11,611,524 ROCs in Scotland
- 1,433,328 ROCs in Northern Ireland
The RO scheme requires suppliers to buy a certain percentage of the power they sell to customers from renewable sources.
Accredited generators receive a set number of Renewable Obligation Certificates (ROCs) for each megawatt hour they produce, with the rate depending on a number of factors including technology type. They can then sell these certificates to suppliers.
Suppliers must present enough ROCs to Ofgem each year to demonstrate they have met their yearly obligation and make up any difference with buyout payments. These payments are first used to cover the administration costs of the scheme, with the rest being returned to suppliers in proportion to the number of ROCs they submitted to Ofgem.
If the outstanding payments following the final deadline exceed a certain threshold known as the relevant shortfall, the mutualisation process is triggered. The shortfalls are £15.4 million for England and Wales and £1.54 million for Scotland
Suppliers who met all or part of their obligation must together fill the gap over four quarterly payments.