Four small energy suppliers have been ordered to pay almost £15 million in unpaid green taxes or face losing their licence.
The energy regulator Ofgem has ordered Robin Hood Energy, Toto Energy, Gnergy and Delta Gas and Power to pay £14.7 million collectively for failing to make payments to the Renewable Obligation scheme. They have been given until the end of the month to make the payments or else they could be stripped of their licences.
Under the Renewable Obligation scheme, all energy suppliers in the UK must pay towards the development of renewable energy such as wind and solar power, in an attempt to reduce the country’s carbon emissions. The deadline to make the payments was on September 1, which the four suppliers in question missed.
“This enforcement action sends a strong signal that suppliers must meet their obligations or pay the consequences,” said Mary Starks, executive director of consumers and markets at Ofgem. “The Renewables Obligation schemes provide important support to renewable electricity generators and play an important role in Great Britain’s journey to a net zero emission economy by 2050.
“Supplier failure to comply with the schemes undermines the integrity of the schemes and is unacceptable. It also adds to the costs of other suppliers who do meet their obligations as they have to absorb or make up any shortfall. This enforcement action sends a strong signal that suppliers must meet their obligations, or pay the consequences which could mean losing their licence.”
Last year, three other energy suppliers also missed the deadline to pay into the scheme. URE Energy since had its licenced removed, while Economy Energy and Spark went out of business not long afterwards.
“This is not a new problem,” said Gillian Guy, chief executive of Citizens Advice. “Last year, less than half of the initial unpaid renewables obligation was ever paid back. Energy suppliers should not be allowed to build up these levels of debt in the first place.”
Robin Hood Energy owes a total of £9.4 million, and it said it’s committed to making the payments and has arranged to pay them in instalments. Toto Energy owes around £4.55 million and has also committed to making the payments, although it challenged Ofgem’s decision.
A spokesperson for Robin Hood Energy said: “We arranged a meeting in August to discuss this matter with Ofgem and were advised that, as long as our Renewable Obligation Certificate payment is made by March 2020, which we have always planned to do, then this matter will be resolved.”
A spokesperson for Toto Energy said: “We disagree with the reasons for their decision. We remain committed to meeting all of our obligations and continuing to deliver excellent service to our customers.”
