Pixie Chart of the week | Q418 Feed-in Tariff mutualisation – assessing the risk

On 13 November Ofgem announced that FiT mutualisation had been triggered, due to a £4.17mn shortfall in the levelisation fund. This is just above the £4.07mn threshold. This equates to an estimated 565GWh supply volume that did not pay into the fund. This is calculated to have an impact of ~7p/MWh on the confirmed Q318 levelisation, pushing it to £7.45/MWh.

Further analysis by Cornwall Insight in association with Pixie Energy found that a shortfall in the fund is expected for Q418. There has been 274GWh of unclaimed supply so far from failures of suppliers Ure Energy, Ephase, Extra Energy and Spark Energy. Currently, this unclaimed volume equates to a £1.33mn shortfall in the levelisation fund. Though more than two thirds under the mutualisation threshold, further supplier failures could exceed this lower boundary. This would cause another trigger of mutualisation that will impact domestic bills.

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