Four energy suppliers have been given a month to pay £14.7 million owed in green taxes or face losing their licences, energy regulator Ofgem has announced.
Robin Hood Energy, Toto Energy, Gnergy, and Delta Gas and Power failed to meet the original deadline of September 1 for renewable energy payments, which all suppliers must make.
Failure to make the payments is seen as a warning sign in the industry that a company may be struggling.
Of the three that failed to meet the second deadline last year, one – URE Energy – had its licence removed and the other two – Economy Energy and Spark – went bust.
The payments buy Renewable Obligation Certificates which show to Ofgem that the companies are funding green initiatives to help move the UK away from relying on fossil fuels.
- Robin Hood Energy Ltd – £9,435,925
- Toto Energy Ltd – £4,555,880
- Gnergy Ltd – £637,876
- Delta Gas and Power Ltd – £91,937
Robin Hood Energy, which is a not-for-profit supplier owned by Nottingham City Council, owes £9.4 million, Toto Energy £4.6 million, Gnergy £673,876, and Delta £91,937.
Mary Starks, executive director of consumers and markets at Ofgem, said: “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.”
Robin Hood has been struggling recently, and has seen the local authority that owns it call in external advisers to assess the business.
Nottingham City Council has invested around £40 million into the company, but it continues to struggle and annual accounts due with Companies House are now two months overdue.
Energy expert Rik Smith, at uSwitch, said: “This is an ominous sign that a handful of challenger suppliers are shirking their responsibilities towards green energy generation – which is crucial to Britain’s efforts to reduce its greenhouse gas emissions.”
He added that if their licences end up being revoked, it would cause “considerable disruption for their customers, not to mention leaving the rest of the energy market to pick up the tab”.
A Toto Energy spokesman said: “We regret Ofgem’s decision to issue this consultation at this time. We disagree with the reasons for their decision.
“We remain committed to meeting our all of our obligations and continuing to deliver excellent service to our customers.”
A spokesman 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 (ROCs) payment is made by March 2020, which we have always planned to do, then this matter will be resolved.”
Gnergy complained that it was not given an option to meet Ofgem, unlike Robin Hood.
Chief executive and founder Tikendra Dewan said: “We were surprised to read Robin Hood Energy claims that a meeting had been held in August 2019 between RHE and Ofgem and the latter had agreed for the payment of £9,435,925 to be made by March 2020 while we were not even given an opportunity of a meeting or a proposed payment plan to clear the sum of £637,876 by December or January with interest.
“What I also don’t understand is would it not make sense to allow a payment plan as in any business, this would ensure that Ofgem do receive the funds owed while also negating the negative impact on the other suppliers which inadvertently falls on the customers.
“Argumentatively if the company then failed to comply with this commitment it would go into administration anyway. The ROC includes payment by suppliers for a large volume of customers who have yet to pay the supplier.”