Ofgem opens investigation into Symbio Energy over late Renewables Obligation and Feed-in Tariff payments

What is the Renewables Obligation?

The Renewables Obligation scheme was introduced to encourage UK energy suppliers to generate electricity from renewable sources.

To show that these obligations have been met, energy suppliers must submit Renewable Obligation Certificates (ROCs) to Ofgem. If suppliers don't have the necessary ROCs, they need to make a payment into a buy-out fund.

Each licensed electricity supplier is required on an annual basis to either purchase and redeem a requisite number of Ofgem Renewable Obligation Certificates as calculated based on their annual electricity sales total or to pay an equivalent amount into a buy-out fund (the proceeds of which are then distributed on a pro-rata basis to those suppliers that have presented ROC's) or a combination of these two options.
 
Energy suppliers must submit two sets of sales data to Ofgem for any group licensed electricity supply companies on an annual basis.

Many energy suppliers have been penalised for failing to pay their Renewable Obligations on time since their introduction. In December, it was revealed that ten energy suppliers who failed to meet the late payment deadline for their Ros have gone bust or had their licences revoked by Ofgem.

According to the energy regulator, the total shortfall across all RO schemes is around £33,135,933.32, excluding interest. Suppliers' failure to pay what they owe has resulted in mutualisation (the shortfall being redistributed among energy suppliers who have paid their dues) being triggered for three consecutive years.

Also read : Renewables Obligation Mutualisation risks are growing

Symbio investigation

Symbio Energy is under investigation by Ofgem for its late payments into the schemes buy-out fund and failed to present the required number of ROCs by both the initial and late payment deadlines.

The buy out fund deadline was August 31^st, and the late payment deadline is October 31^st.

The energy supplier did, however, pay off the money it owed by November 13th 2020 but due to missing the deadlines, Ofgem are likely to be concerned over the company's ability to pay further Ros and its financial viability overall.

As well as failing to meet its RO deadlines, Symbio Energy also missed three other payments over four months for other government environmental schemes.

Symbio failed to pay off a RO mutualisation payment by the required deadline, and two FIT quarterly levelisation payment deadlines were missed.

"The opening of this investigation demonstrates that Ofgem takes compliance with the Feed-in Tariff and Renewable Obligation seriously and that not making payment on time is unacceptable. The investigation will consider whether further enforcement action is required, which could include a financial penalty," said Ofgem in a statement.

Further Reading

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