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Energy Efficiency Schemes

Volume 503: debated on Wednesday 6 January 2010

To ask the Secretary of State for Energy and Climate Change (1) what plans he has for the future of his Department’s energy efficiency and lowest rate tariff schemes; (307274)

(2) what his most recent assessment is of the relationship between the performance of energy supply companies in meeting their obligations under his Department’s energy efficiency and lowest rate tariff schemes and their market share;

(3) what estimate he has made of the (a) number and (b) percentage of households which have received assistance from each energy supply company under his Department’s energy efficiency and lowest rate tariff schemes; and what the cost to his Department of each such scheme has been to date.

DECC set out the future of its energy efficiency schemes in the Low Carbon Transition Plan published July 2009, this included extending the Carbon Emissions Reduction Target (CERT) (an obligation on energy suppliers to meet household carbon saving targets) to the end of 2012 before moving to a new framework post 2012. A consultation on the CERT extension will be published before Christmas and further details on delivery arrangements post 2012 will be published early in the new year.

The CERT is a GB-wide carbon saving obligation on energy suppliers so it is delivered at no cost to DECC. Ofgem reported in July 2009 that suppliers had made good progress towards their targets having achieved the following percentage savings against their individual obligations (the overall target is 185 million tonnes of lifetime CO2 savings) by the end of the first year of CERT:

Percentage

British Gas

54

EDF Energy

56

Npower

30

E.ON

55

Scottish and Southern Energy

49

Scottish Power

56

Reporting is by measure and not by household. Together, suppliers delivered a significant number of energy efficiency measures by the end of the first year of CERT including around 850,000 cavity wall insulation jobs, almost 1.5 million loft insulation jobs, 40,000 solid wall insulation jobs and some 200 million compact fluorescent lights.

The Community Energy Saving Programme (CESP) only commenced in September 2009, no households have yet received assistance. CESP runs to December 2012 and it is estimated that 90,000 households will benefit.

In the 2008 Budget the Chancellor announced an increase in suppliers’ collective expenditure on their voluntary social programmes to at least £100 million in 2008-09, £125 million in 2009-10 rising to £150 million by 2011. Energy supplier’s social tariffs are delivered at no cost to the Government.

Ofgem monitors the suppliers’ social programmes on behalf of Government. In its latest report on suppliers’ social programmes, published in August 2009, Ofgem confirmed that suppliers have each met the first year spend target as set by Government and that suppliers’ collective expenditure totalled £157 million, which exceeded the Government set target for the first year of the agreement by 57 per cent. £130 million of this collective total expenditure was attributable to social tariffs. This report also detailed the number of customer accounts benefiting from a social tariff and the total savings to customers of these tariffs, per supplier, as at 31 March 2009. A copy of this report can be found online at:

http://www.ofgem.gov.uk/Sustainability/SocAction/Suppliers/CSR/Documents1/Monitoring_suppliers_social_spend_2008_09_final.pdf

The initial findings report of Ofgem’s energy supply probe gave a snapshot of the total number of customer accounts per supplier, as at June 2008. A copy of the energy market probe initial findings report can be found online at:

http://www.ofgem.gov.uk/Markets/RetMkts/ensuppro/Documents1/Energy%20Supply%20Probe%20-%20Initial%20Findings%20Report.pdf

According to these reports the total savings to customers during 2008-09, customer accounts on a social tariff as at 31 March 2009 and total electricity and gas customers per supplier as at June 2008 is reported as:

Supplier

Energy type

Total savings to customers (£ million)

Total customer accounts on a social tariff as at 31 March 2009

Total customer accounts as at June 2008

Percentage of customer accounts on a social tariff1

British Gas

Electricity

193,148

6,038,464

Gas

323,131

9,762,950

Total

77.4

516,279

15,801,414

23.3

EDF Energy

Electricity

99,073

3,605,090

Gas

45,939

1,602,369

Total

8.8

145,012

5,207,459

2.8

E.ON

Electricity

25,447

4,922,100

Gas

23,608

2,913,408

Dual Fuel

2,826

Total

15.65

51,881

7,835,508

0.7

Npower

Electricity

65,251

4,047,020

Gas

48,585

2,553,340

Total

12.28

113,836

6,600,360

1.7

Scottish Power

Electricity

45,519

3,217,808

Gas

29,003

1,919,852

Total

1.5

74,522

5,137,660

1.5

SSE

Electricity

64,661

5,255,087

Gas

3,255,123

Dual Fuel

38,279

Total

14.87

102,940

8,510,210

1.2

Total

Electricity

493,099

27,085,569

Gas

470,266

22,007,042

Dual Fuel

41,105

Total

130

1,004,470

49,014,084

2

1 As data for social tariffs and total customer accounts are not as at the same period of time these percentages should be treated as approximate.

2 As Ofgem report on electricity, gas and dual fuel customer accounts on a social tariff in their social programmes report and on electricity and gas customer accounts in their the energy supply probe, initial findings report, we have only provided the percentage of total customer accounts per supplier on social tariff.

The Low Carbon Transition Plan also included an announcement that we will introduce social price support when the voluntary agreement ends in March 2011. We have since introduced clauses on social price support as part of the Energy Bill. We also announced in the pre-Budget report that we would require energy suppliers to make £300 million available per year by 2013-14 for social price support. This is double what they have agreed to provide in the final year of the voluntary agreement.