Energy regulator Ofgem has issued Delta Gas and Power Ltd with a Final Order, compelling it to pay £530,809.20 plus interest in outstanding Renewables Obligation payments. Delta is a non-domestic supplier, serving 1,690 business customers in the UK.
Delta failed to pay into the buy-out fund or present the required number of Renewable Obligation Certificates by 31 August and 1 September 2022 respectively, and is now compelled to pay by the late payment deadline of 31 October 2022 with accrued interest. If they do not pay, Ofgem may take further enforcement action including revoking their supply licenses
Renewables Obligations (RO) is a government scheme in England, Scotland, Wales, and Northern Ireland, designed to support large-scale renewable electricity projects in the UK. As a key part of the ambition to reach net zero by 2050, the scheme places an obligation on UK electricity suppliers to source an increasing proportion of the electricity they supply from renewable sources. Ofgem administers the schemes on behalf of government.
Integrity of the RO
It is crucial to protect the integrity of the RO scheme and uphold this where there is non-compliance, to incentivize the uptake of renewable electricity within the UK.
Charles Hargreaves, Deputy Director of Enforcement and Emerging issues at Ofgem said: "The unprecedented rise in gas prices over the last twelve months only reinforces the need to accelerate the shift away from fossil fuels, strengthening the case for sustainable, home-grown energy.”
“Today’s enforcement action serves as a reminder to suppliers to follow through on compliance with the Renewables Obligation, which ultimately supports consumers, the energy ecosystem, and a wider UK 2050 Net Zero ambition."
Meeting annual obligations
Suppliers can meet their annual obligation by presenting RO certificates
Suppliers can meet their annual obligation by presenting RO certificates - known as ROCs - making a payment into the buyout fund or a combination of the two. Once paid, Ofgem will redistribute the money held to suppliers in proportion to the number of ROCs each supplier presented to Ofgem for that compliance period (once scheme administration costs are withdrawn).
Earlier this month, Ofgem consulted on issuing Final Orders for Delta and Logicor Energy Limited (Logicor) for unpaid Renewable Obligation payments. While Logicor has paid its obligation in full, Delta is yet to meet its obligation and has therefore been issued with a Final Order by Ofgem, as the regulator follows through on taking robust action.
Alongside working on short-term plans for consumer bills and winter plans, Ofgem is pushing ahead with regulation and enforcement to set the standards for cleaner and affordable energy in the future.
