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Ofgem redistributes £384k of recovered RO payments among energy suppliers

Electricity suppliers are required to obtain a certain number of Renewables Obligation Certificates in proportion to the amount of electricity they supply to customers. Image: Getty

Electricity suppliers are required to obtain a certain number of Renewables Obligation Certificates in proportion to the amount of electricity they supply to customers. Image: Getty

Following Ofgem redistributing the £58,375,203 Renewables Obligation (RO) late payment fund in December to energy suppliers, a further £384,278.28 has been recovered by the regulator.

This was recovered in payments from November 2021 to February 2022 from one supplier who failed to discharge its RO as of the deadline date.

It was arranged to be redistributed on 22 April 2022 to suppliers in proportion to the total mutualisation payments they are responsible for making for the 2020-21 relevant period.

Mutualisation is the process where this shortfall is distributed among suppliers who have made their RO payments.

It was triggered for the fourth year in a row in December 2021 after the high power prices left many suppliers struggling- with a significant number exiting the market. This left an RO shortfall of £218,300,151.73.

Last year, Ofgem announced plans to consult on how to better address supplier payment default under the RO scheme.

In 2021, 37 supplier groups across 66 obligations failed to meet the initial 1 September deadline for RO payments. Of those, 12 obligations were fully discharged by making the late payment deadline of 31 October.

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