ESG Enforcement Tracker

Key facts:

In 2021, Ofgem conducted a market wide review of suppliers’ 2019 and 2020 Fuel Mix Disclosure (FMD) statements in an effort to ensure that customers are given accurate and transparent information about the energy they consume to make informed choices about their energy supply. FMD statements play an important role in facilitating provision of accurate information.

Ofgem noted that a number of suppliers had included an overstated proportion of renewable electricity in their FMD statements.

It appeared that suppliers reported to have supplied a total of 2,151,820 megawatt hours (MWh) more in electricity from renewable energy than was supported by their evidence due to those suppliers not holding 2,151,820 Renewal Energy Guarantee of Origin (REGO) and Guarantee of Origin (GoO) certificates as of 1 July 2020.

These certificates are used to demonstrate that electricity has been generated from renewable sources. The equivalent of REGOs for EU Member States is GoOs; as of 1 January 2021, the EU no longer recognises UK REGOs.

Ofgem noted the following common issues of non-compliance with SLC 21:

1. Errors in calculating the total amount of energy supplied to customers, which meant suppliers held insufficient REGO and/or GoO certificates to support the proportion of electricity reported to be from renewable sources.
2. Administrative errors which resulted in REGO certificates not being held in the correct account on the Renewables and Combined Heat and Power (CHP) register on 1 July 2020. This meant the certificates could not be used for FMD purposes.
3. Suppliers that did not intend to purchase REGOs and/or GoOs had incorrectly used the UK Average Fuel Mix figures, instead of Residual Fuel Mix figures, as their FMD statement.

As a result of Ofgem’s findings, 18 suppliers agreed to pay a total of £90,000 into the Energy Industry Voluntary Redress Scheme (VRF) in recognition of non-compliance with SLC 21.

Eleven suppliers that were identified to have held insufficient REGOs and/or GoOs for their 2019 and 2020 FMD statements agreed to surrender REGOs equivalent to their FMD discrepancy as a proportionate reflection of their non-compliance.