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Energy Blog Energy Executive Derides Government Energy Plans

Energy Executive Derides Government Energy Plans

Chris Hurcombe
by Chris Hurcombe August 14, 2013
Energy Supplier Triples Profits

In a rare public display of opposition to a flagship government scheme by a senior energy executive, the CE of industry giant Centrica has branded the Energy Company Obligation (Eco) as too complicated and too expensive.

Chief Executive Sam Laidlaw has voiced vocal opposition to the Eco programme in an interview with the Financial Times this week, citing a lack of effectiveness and higher-than-anticipated costs as reasons for an overhaul.

The Energy Company Obligation programme came into effect at the start of 2013 and puts the onus on the so-called ‘Big Six’ energy suppliers to improve insulation in the homes of their customers, prioritising those with low-incomes first and formats in a bid to tackle fuel poverty.

However, Mr Laidlaw said the Eco scheme was up to four times as expensive to run as it’s predecessor, known as Cert. Under Cert, carbon abatement was around £25-£30 per tonne – whereas Eco has seen that rise to £100-£120 per tonne, a figure that has seen Centrica’s environmental costs leap by £100m this year.

“We want to sit down with the government and see whether this is actually the most cost effective way of reducing customers’ carbon emissions and whether it can be changed to bring down costs,” he told the Financial Times.

Despite additional criticism being leveled by RWE npower, the The Department of Energy and Climate Change said the complaints from Centrica yielded “no hard evidence to suggest we should change our estimate”.

Additionally, the DECC said comparing Eco to Cert was “simply nonsensical”. Analysts have also mentioned that poor reception of The Green Deal had left more onus on energy companies to cover the cost of insulating the UK’s energy-efficient homes and buildings.

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