Small energy supplier URE has been given three months to pay its outstanding Renewables Obligation payment or risk losing its licence.
Ofgem has issued a final warning – and can revoke URE’s supply licence if it doesn’t pay.
Under the Renewables Obligation, energy suppliers are obliged to buy a certain amount of power from renewable sources. If they do not, they pay into a buyout fund.
The cost of the RO is added to the customer bill and the suppliers then pay into the fund at the end of the year.
Many of the small suppliers that have gone bust in recent months failed to pay into the RO buyout fund as they struggled to stay afloat.
The buyout fund was £58.6m light for the 2017-18 period. Ofgem acknowledged the scale of the problem last November, announcing it was tightening rules for new market entrants. Within days, several more firms that owed millions in RO payments had ceased trading.
Ofgem told URE to pay the £209,013.78 owed for 2017-18 by no later than 5pm on 31st March 2019. It hasn’t paid. Ofgem has now given it three months to do so, or risk its licence being revoked with 30 days notice.
Cornwall Insight suggests the RO buyout fund will be up to £43.8m short for 2018-19, indicating that the collapse of small suppliers may be followed by a second act.
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