GnERGY Ltd, one of UK’s small energy suppliers, ceases to trade after struggling to pay the UK regulator Ofgem’s Renewable Obligation buyout fund.
Ofgem launched an investigation on the non-compliance issue last January and later issued a failure notice to the small firm. The industry watchdog found that GnERGY did not comply with the final order given in October to settle unpaid fines related to its renewable quotas.
Failure to Pay
Small energy supplier GnERGY has stopped trading in the market following its inability to pay £673,876.62 to Ofgem’s Renewable Obligation buyout fund. The firm was revealed to have failed in demonstrating its adherence to sourcing enough energy from renewable resources.
The company, managed by ex-Gurkhas, has struggled to pay its fines to the energy regulator since and had fallen short on assuring the industry watchdog that they would be meeting the obligation.
Another supplier chosen by Ofgem will now handle GnERGY’s 9,000 domestic consumers and some non-domestic accounts.
Director for Future Retail Markets Philippa Pickford stated GnERGY customers need not worry because the regulator’s safety net will ensure that their energy supply isn’t disrupted and that the domestic account’s credit balances are protected.
Pickford said Ofgem would be selecting the supplier to handle all of GnERGY’s existing customers. Meanwhile, the regulator advises the clients not to switch to a different energy provider until after the body has appointed a supplier. They are urged to wait for the new supplier to reach out to them in the following weeks.
Customers are further asked to take a meter reading on the ready for when the new energy provider contacts them to ensure a smooth transition, such as in paying back outstanding credit balances quickly.
GnERGY is the first small energy supplier to cease trading this year after struggling to grow for two years along with other small-scale firms.
Three other energy firms, including Robin Hood Energy, Toto Energy and Delta Gas, have received a final order from Ofgem. Unfortunately, Toto Energy is the 16th supplier that ceased trading since 2018.
Robin Hood Energy has criticised Ofgem’s Renewable Obligation payments handling. The industry watchdog paid out £109,529,764 to energy suppliers that successfully presented their Renewables Obligation Certificates (ROC) for 2019.
GnERGY received the final order in October and was given until the end of that month to pay their Renewable Obligation dues. However, the supplier failed to comply, which prompted Ofgem to bring down the failure notice.
Energy suppliers in the country are expected to demonstrate that they are sourcing electricity from renewables and are meeting their required quotas. They must present the Renewable Obligation Certificates (ROCs) by September 1st. Any supplier failing to meet the grace period must pay a fine into the Renewable Obligation buyout fund.
Tikendra Dewan, GnERGY CEO stated last October that a meeting was set with Ofgem in November 2019, to present the company’s plans moving forward in 2020, including its merger with another company.
The firm asked for more time from the regulator, saying they will follow all instructions stipulated in the warning letter. Dewan told if they were given ten days to clear their dues, the bad publicity would have been avoided.
Executive Director Mary Starks for consumers and markets stated the RO schemes enable crucial support for renewable energy generators and are a critical element to achieving the UK’s net-zero carbon emissions goal by 2050.
Starks said any energy provider undermining the RO scheme by ignoring deadlines would be subjected to intense enforcement action, which could further lead to licence revocation.
The now-defunct Breeze Energy also had a Renewable Obligation penalty amounting to £486,232,06 last October, which it failed to comply by the deadline.
Other small suppliers that have stopped operating after failing to comply with Ofgem’s regulations include Toto Energy, Solarplicity, Eversmart, Extra Energy, Brilliant Energy, Spark Energy, and National Gas and Power. Also, included on the list are Future Energy, Iresa Energy, Gen4U, Usio Energy, One Select, Our Power and Economy Energy.