There was a record combined shortfall of more than £276.5 million in the Renewables Obligation (RO) buyout funds for 2020/21, Ofgem has stated.
Under the RO scheme, electricity retailers are required to source a proportion of the electricity they sell from renewable generators. This obligation is set as a number of Renewables Obligation Certificates (ROCs).
Suppliers can meet their obligations by either presenting ROCs acquired from accredited generators, making buyout payments, or using a combination of the two.
The deadlines for making buyout payments and submitting ROCs are 31 August and 1 September respectively. Those that do not meet their obligation in full must make late payments by 31 October and pay interest on the shortfall in the meantime.
The total obligation for 2020/21 amounted to almost 119.1 million ROCs.
Ofgem confirmed that suppliers presented more than 105.2 million ROCs to meet 88.4% of the total obligation and made more than £415.5 million of buyout payments at a price of £50.05 per ROC.
However, 37 energy suppliers failed to meet their total obligation by the 31 August and 1 September deadlines, resulting in a combined shortfall of £276.5 million in the buyout funds for the RO schemes for England and Wales, Scotland and Northern Ireland.
There were shortfalls of around £105 million last year and £206 million the year before that.
Ofgem has since redistributed the buyout fund at a recycle value of £3.87 per ROC and will redistribute late payments by 1 January 2022.
The regulator recently issued orders to seven suppliers to make £17.9 million of late payments by 31 October or risk further enforcement action.