The Renewables Obligation (RO) requires licensed electricity suppliers to source a proportion of the electricity they supply to UK customers from renewable sources. We set suppliers’ obligations as a number of Renewables Obligation Certificates (ROCs).
The obligation levels for 2022-23, announced by the Department for Energy Security and Net Zero (DESNZ) on the 29 September 2021, are:
Multiplying these obligation levels by the total electricity supplied (in MWh) to UK customers during this obligation period (1 April 2022 – 31 March 2023) and rounding to the nearest whole number, the total obligation for 2022-23 is 121,847,263 Renewables Obligation Certificates.
Split out for each obligation jurisdiction this is:
Suppliers were able to meet their obligations for 2022-23 by 1 September 2023 by:
Any suppliers who did not meet their obligations in full by 1 September were required to make a late payment by 31 October.
We have recently redistributed the Renewables Obligation buy-out fund for 2022-23. Details of the obligations and total payments for each Renewables Obligation scheme are shown in the Table 1 below.
| Obligation | Total Obligation (ROCs) | ROCs presented by suppliers | Percentage of obligation met by ROCs | Buy-out payments made by suppliers (rounded to nearest pound) | Buy-out redistributed |
|---|---|---|---|---|---|
| England & Wales (RO) | 109,608,100 | 97,321,958 | 88.79% | £642,842,015 | £635,722,602 |
| Scotland (ROS) | 10,822,484 | 8,964,258 | 82.83% | £97,888,759 | £96,804,652 |
| Northern Ireland (NIRO) | 1,416,679 | 1,403,352 | 99.06% | £704,785 | £696,976 |
| Total | 121,847,263 | 107,689,568 | 88.38% | £741,435,559 | £733,224,230 |
Suppliers that presented ROCs towards their obligations received buy-out fund recycle payments on 19 and 31 October 2023. The amounts to be redistributed are shown in the far-right column in Table 1. We reached these values by withdrawing our and Northern Ireland Authority for Utility Regulation’s (UR) administration costs, factoring in interest and rounding down the redistribution amounts to the nearest whole pound. Suppliers received approximately £6.81 for each ROC they presented. The proportion of the total ROCs each supplier presented, and therefore the share of buy-out payments they received, is shown in Table 2 (rounded to 2 decimal places).
| Supplier group | % Proportion of ROCs presented |
|---|---|
| 3T POWER LIMITED | |
| AXPO UK Ltd | 0.29% |
| BGI trading Ltd | |
| British Gas Trading Ltd | 13.55% |
| Brook Green Trading Ltd | 0.77% |
| Bryt Energy Ltd | 1.26% |
| Budget Energy Ltd | 0.05% |
| Click Energy | 0.03% |
| Conrad Energy (Holdings) Ltd | 0.01% |
| Corona Energy Retail 4 Ltd | 0.37% |
| Drax Energy Solutions Ltd | 6.37% |
| E (Gas and Electricity) Ltd | 0.22% |
| E.ON Energy Ltd | 0.07% |
| E.ON Next Supply Ltd | 8.80% |
| E.ON UK Plc | 0.01% |
| Ecotricity | 0.18% |
| EDF Energy Customers Ltd | 19.43% |
| Electricity Plus Supply Ltd | 1.09% |
| Eneco energy Trade BV | 0.22% |
| Energia | 0.09% |
| ENGIE Power Ltd | 2.98% |
| EPG Energy Ltd | 0.01% |
| ESB Independent Energy (NI) Ltd | 0.36% |
| F & S Energy Ltd | |
| Go Power (LCC Power Limited) | 0.10% |
| Good Energy Ltd | 0.27% |
| Green Energy (UK) plc | 0.05% |
| Limejump Energy Ltd | |
| Npower Commercial Gas Limited | 9.95% |
| Octopus Energy Ltd | 4.42% |
| Octopus Energy Operations Ltd | 1.86% |
| Opus Energy (Corporate) Limited | 0.30% |
| Opus Energy Ltd | 0.73% |
| Orsted Power Sales (UK) Ltd | |
| OVO Electricity Ltd | 0.70% |
| Power NI Energy Ltd | 0.40% |
| Pozitive Energy Ltd | 0.13% |
| Rebel Energy Supply Ltd | |
| Scottish Power Energy Retail Ltd | 7.39% |
| SEFE Energy Limited | 0.18% |
| Shell Energy Retail Ltd | 0.52% |
| Shell Energy UK | 0.88% |
| SmartestEnergy Business Ltd | 0.31% |
| SmartestEnergy Ltd | 2.63% |
| Squeaky Clean Energy Ltd | |
| SSE Energy Supply Ltd | 0.27% |
| SSE PLC | 5.40% |
| TotalEnergies Gas & Power Limited | 6.13% |
| Tradelink Solutions Ltd | |
| UK Power Reserve Ltd | |
| Utilita Energy Ltd | 1.11% |
| Valda Energy Ltd | 0.08% |
| Vattenfall Energy Trading GmbH | |
| Wilton Energy Ltd | 0.01% |
There was a combined shortfall of £7,223,616.96 in the buy-out funds, this was due to four suppliers not meeting their total obligations by the 1 September deadline. These suppliers consequently owed late payments.
The breakdown of the shortfall by jurisdiction this was:
The shortfalls in the buy-out funds were below the respective mutualisation thresholds of £65,800,000 for England and Wales and £1,540,000 for Scotland (as published by Ofgem on 15 February 2022), as such mutualisation has not been triggered for the 2022-23 Compliance year.
The deadline for suppliers to make late payments was 31 October 2023 and we will redistribute them before 1 January 2024. This will include interest paid by the suppliers at an annualised rate of 10.25% (5% + Bank of England base rate as of 1 September 2023). When we redistribute the late payments, we will also confirm the final recycle value, which will include an extra amount on top of the £6.81 per ROC.