There was a shortfall in Renewables Obligation buy-out funds of £205,998,428.26 in September, according to Ofgem figures. The regulator says 42 suppliers did not make their full payment at that time. Although some have now made late payments, Ofgem confirmed that the amount still outstanding would trigger ‘mutualisation’ of the remaining shortfall, although it is still determining how large that bill will be.
Suppliers have to present Renewables Obligation Certificates to cover a percentage of the power they sell each year. Suppliers who do not have enough certificates from generating renewable energy can make a payment (this year of £47.22) into the buy-out fund for each MWh not covered by a ROC. The buy-out fund is distributed pro rata (and minus administration costs) to those suppliers who presented ROCs. This raises the value of each ROC. This year suppliers are being paid £6.80 for each ROC presented.
Of the 42 companies that missed the deadline some have now paid (eg Robin Hood Energy), some have gone out of business (eg Toto Energy) and some remain outstanding. Late payments will be collected and redistributed to suppliers in January. Any shortfall will be mutualised.