ScottishPower has become the latest member of the big six to criticize the cost of green programmes. The supplier claims initiatives such as the “Energy Company Obligation” (ECO) have seen the cost of energy efficiency schemes double in the last 12 months.
Industry analyst John Musk from RBC Capital Markets said: “I think we are looking at high single digit price increases pre-winter.”
ScottishPower: Government predictions are wrong
Speaking on the issue, ScottishPower’s chief corporate officer Keith Anderson said: “We are seeing a big increase in our costs associated with the new ECO scheme. What we are seeing coming through is, this is in line with what we predicted – not what the government predicted.
“We will continue to work incredibly hard to make sure our businesses are as effective and efficient as possible and try to manage these costs as best we can. We don’t predict when price rises will happen or rule price rises out.”
As part of the ECO programme energy suppliers need to help vulnerable customers manage their energy consumption by installing features such as solid wall insulation in their homes. The government insists the scheme does not cost more than previous green initiatives, at around £1.3 billion per year and no cost to the consumer.
Energy companies have complained that the cost of green schemes is in fact closer to £2.4 billion, which could add £94 to individual consumer energy bills.
DECC responded to claims of inaccurate predictions stating that there is “no evidence that would lead us to question our assumptions of ECO costs”.
The organisation also said it would monitor energy suppliers to ensure at they were passing on actual costs and not simply upping charges.
The comments are the latest in an on-going argument between energy suppliers and the government regarding the main cause of energy price rises. npower recently stated that green initiatives would lead to a £240 increase in consumer tariffs by 2020.