Catalyst Commercial - Energy Brokers UK
Market Leading Business
Energy Consultants
Your Trusted Commercial Energy Partners
Energy Blog Energy Companies Set to Delay Energy Companies Obligation

Energy Companies Set to Delay Energy Companies Obligation

Chris Hurcombe
by Chris Hurcombe October 2, 2013
Hydrogen Breakthrough At Last

The biggest commercial energy providers in the UK have entered last-minute negotiations with the British Government in an attempt to delay the commencement date of a new scheme. The Energy Companies Obligation, brainchild of the Coalition Government, is designed to be one of several ‘green’ schemes to place more emphasis on growing Britain’s sustainable commercial energy sector and take the pressure off the public’s rising energy bills.

Known as ECO, the Energy Companies Obligation puts the onus on energy suppliers to offer insulation to homes across the UK – the end game; Britain’s ageing housing stock becomes more energy efficient, and the taxpayers living in them spend less money on heating thanks to the insulation.

With a general election on the horizon, the Coalition Government is keen to push for the launch of the scheme, however Centrica, owner of British Gas, and SSE, are believed to be progressing in a request for an 18-month reprieve to meet the ECO scheme’s targets.

The crux of their arguments is that the scheme is an expensive one to implement, and some of the companies under the ‘big six’ banner would have to raise prices to be able to afford to meet the goals laid out by the scheme.

Ministers estimate figures suggest that ECO should cost £1.3bn per year, which is the equivalent of £50 on a household bill, however if energy companies fail to meet their goals the government will place a fine of up to 10% of turnover.

However, industry figures say the scheme is far more expensive, estimating a ceiling of £3.1bn per year or £125 per household.

A spokesman for SSE said: “The most important consideration, as always, is affordability for customers. With the potential for costs to escalate as the scheme goes on and with the Green Deal still in its early days, it makes sense to extend the first phase for 18 months in order to protect customers.”

The discussions are ongoing, with a final word from the government on whether to press forward with the scheme expected before the end of the week.