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HomeRenewablesDraxRO mutualisation: what it is and what it means for your bills?

RO mutualisation: what it is and what it means for your bills?

Suppliers fund the scheme but pay for it in arrears – sometimes leaving a shortfall. Due to challenging trading conditions over the last few years, several suppliers have gone out of business.

These suppliers failed to meet their share of the RO, and so left a shortfall in funds above a certain amount known as the Mutualisation Threshold. To cover the deficit, the energy regulator, Ofgem, divided this cost across all participating suppliers.

Mutualisation could still occur in the future if a supplier fails. However, Ofgem now requires suppliers to ringfence RO funds on a quarterly basis. This makes the likelihood and impact of a mutualisation event much smaller. Find out more here.

Energy Live News
Energy Live News
This article first appeared on Energy Live News, an award winning news service. Their mission is to give you balanced news, analysis, commentary of energy from their dedicated team of quality journalists and production staff.
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