Capacity Market: 33 suppliers owe £38m in payments


Energy suppliers have failed to pay £38m in Capacity Market back payments. Some have already gone bust while others are teetering under the weight of outstanding Renewables Obligation levies.

The deadline for suppliers to make ‘standstill payments’ of Capacity Market (CM) levies covering the period while the market was suspended passed on 22 November.

Around £38 million was still owed to the Low Carbon Contracts Company (LCCC).

LCCC had billed suppliers for £1.17 billion in payments on 14 November for payment within five working days – funds that will be redistributed to capacity providers who have not received CM payments since the market was unexpectedly suspended at the end of 2018 in response to a successful challenge over State Aid clearance.

The number of companies falling short was 33 – fewer than the companies who missed the initial payment deadline for this year’s Renewables Obligation payments, and some of whom had made partial payment.

The LCCC believes that around £8 million of the outstanding debt is not recoverable, because the suppliers concerned have gone out of business. But it vowed to vigorously pursue the remaining £30million – not least because any shortfall in the funds, due to be credited to capacity providers on 13 January, will be ‘mutualised’. Suppliers who have paid will receive an additional invoice for their share of the shortfall on 13 December.

LCCC listed Toto, OneSelect, Eversmart, Electraphase, Ure, Solarplicity, Brilliant, Economy Energy, Our Power, Rutherford and Spark Energy as ‘ceased suppliers’. Of companies still in business, Hudson Energy, whose consumer brand is fast-growing Green Star Energy, was the biggest debtor to the CM fund. Its outstanding bill on 26 November was £8.9 million.

Two of the non-payers have also been ordered to make Renewables Obligation payments. Breeze Energy owes £500k in CM levies alongside £486k in RO payments, while Nabuh Energy added around £310k in CM levies to its £872k bill for the RO. Suppliers will also face bills for ‘mutualisation’ of any shortfall in the Renewables Obligation.

Other debtors (as at 26 November) included E (£3 million), Pozitive Energy (£3.8 million), Breeze Energy (£500k), Eddington Energy Supply (£2.5 million) and Eneco (£1 million, and which is set to be acquired by Mitsubishi).

Co-Operative Energy was the second largest debtor on that date, owing over £6 million, but it had disputed the invoice, as had Flow Energy (owing £2 million).

Back in the routine

November also saw the regular CM payments routine resumed, so suppliers were also asked on 14 November to provide credit cover of around £100 million for the following month’s levies, which LCCC said it had received in full.

The next invoice for ‘business as usual’ CM monthly payments of around £80 million will be issued on 1 December and capacity providers will receive payment on 10 February.

First published on our sister site, New Power.

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