The energy regulator Ofgem has announced a shortfall of £58.6m in this year’s renewables obligation schemes, because several suppliers have been unable to pay. The shortfall is to be recovered from other suppliers. So prudent suppliers, and ultimately their customers, will have to bail out imprudent ones.
Ofgem is considering tighter conditions on new suppliers entering the market. But would this solve the problem?
Surely questions should be asked about the administration of this scheme. How were some suppliers allowed to build up debts of £58m? Should there not be more frequent monitoring, say at quarterly or monthly intervals rather than annually, with payments on account throughout the year?
To protect customers, renewables obligations need to be managed as commercially as networks and wholesale markets.
Stephen Littlechild
Former chief energy regulator
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