As Pressure Mounts, Britain May Delay Costly Green Policies
Britain’s biggest energy companies are in late-stage negotiations with the Government to delay the implementation of a multi-billion pound green scheme to help take the pressure off the price of bills.
Centrica, owner of British Gas, and SSE are pushing for an 18-month reprieve to meet targets under the ECO scheme, arguing that more time to implement the costly programme would ease the financial burden on customers.
Ministers are under added pressure to try to halt bill increases in the wake of Labour leader Ed Miliband’s pledge to cap prices. They are believed to be “receptive” to the companies’ suggestions.
The option of an extension is expected to be included in a consultation document on the future of the ECO, likely to be published early next year.
On Saturday, George Osborne opened the door to reducing the impact of green policies on bills. He said that the Government had to keep a “very close eye on affordability” and that Britain should not be “in front of the rest of the world” in tackling climate change.
The ECO scheme, which began this year, requires major suppliers to cut targeted volumes of carbon emissions by installing energy-efficiency measures for poor customers and insulating homes.
Companies face fines of up to 10pc of turnover if they do not hit the targets by March 2015. Ministers say the ECO should cost £1.3bn per year or the equivalent of £50 on a household bill.
But the industry says it could cost as much as £3.1bn per year or £125 per household. Companies complain it is hard to identify the right customers and homes and that the scheme is being hampered by the slow take-up of the Green Deal, a parallel, voluntary insulation scheme.