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Ofgem: Energy suppliers achieve 99% of efficiency targets

Suppliers who missed target to be investigated

ofgem logoThe UK’s energy suppliers achieved 99% of their energy efficiency targets in 2012, according to a new report from the industry regulator, Ofgem.

The data shows that the vast majority of targets were hit by the big six and smaller suppliers, though some high-profile names – including British Gas, SSE and ScottishPower – failed to hit one or more of their targets.

This has led to Ofgem opening up an investigation into the reasons for the failures.

The overall targets were set by the Department of Energy and Climate Change (DECC) under the Community Energy Saving Programme (CESP), launched in 2009, and the Carbon Emissions Reduction Target (CERT), initiated in 2008.

Helping consumers

Under CERT, companies had until December 2012 to ensure 3.9 million lofts and 2.5 million cavity walls were insulated, while the CESP scheme, which was targeted at vulnerable customers in the most deprived areas of the country, required over 150,000 households to have at least one energy-efficiency measure installed.

This included insulating over 75,000 external solid walls and replacing nearly 43,000 old, inefficient boilers, which Ofgem says saved more than 300 million lifetime tonnes of carbon dioxide emissions before December 31st last year.

Under the schemes, consumers have benefitted from more than six million professionally installed energy-efficiency measures, including 700,000 of the nation’s most vulnerable households.

But some suppliers failed to meet obligations, and Ofgem has now informed the Secretary of State in a report that each of them had failed to achieve one or more of their energy efficiency targets.

As well as British Gas, ScottishPower and SSE, Drax, GDF Suez / IPM and Intergen all fell short of their targets, and Ofgem is now aiming to establish whether consumers lost out because of these failures.

Big difference

Sarah Harrison, Ofgem’s senior partner in charge of enforcement, commented: “At a time of rising energy bills, energy efficiency can make a big difference for consumers. The fact that the industry has delivered 99 per cent of its government energy efficiency targets is to be welcomed.

“However, Ofgem’s role is to ensure that consumers do not lose out by the failure of firms to deliver all the help required or are not disadvantaged by late delivery. This is why Ofgem is today launching investigations into six firms who have failed one or more of their energy efficiency targets set by government.”

Last year, the energy regulator encouraged suppliers to boost delivery of the schemes to ensure targets were met, and sent out a letter to each company in September reminding them that enforcement action could be taken if targets were not met within the timeframe.

In the letter, Ofgem also reminded people that it would take into account as mitigation any additional energy saving measures which were installed after the December 2012 deadline, which would then be considered when levying any enforcement process or potential fines.

However, since January this year, several energy companies have continued to install energy efficiency measures, and Ofgem is to establish the extent of this as it carries out its investigations into some firms’ failures to meet their targets.

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