The autumn statement was released with grand plans for reducing our energy bills by transferring the energy company’s obligation (ECO) to the taxpayer. Energy companies have succeeded in lowering their liability to finance the cost of providing insulation, new boilers and draught-proofing for struggling families and vulnerable people in communities across the country.

Old-age-pensioner-keeps-warm-with-the-aid-of-an-electric-heater-2561284The question is whether this important support for the fuel poor and vulnerable people now considered to be too expensive will be reduced. Last year, 30,000 people died from winter cold related illness, one of the highest levels in Europe. Taxpayers will be financing shale gas extraction (fracking) that will be offset by less support for solar generated electricity and onshore wind. The net result is not beneficial to the taxpayer, nor to the energy consumer, creating less value for money from an economic standpoint.

The claim is that too much of the energy cost is spent on environmental measures. In fact all environmental charges comprise 9% of the average household energy bill of £1,350. These charges are for various services, including support for renewable energy and energy efficiency. Energy companies do not have a track record of success in rolling out programmes like the ECO on a government mandate. ECO replaced CERT and CESP, which were not considered successful programmes because the energy suppliers didn’t meet the government’s targets. Lots of money has been poured into ECO with little result. It’s just counterintuitive that a company whose obligation is to maximize profits for their shareholders is going to invest its resources in lowering its sales volumes by proactively investing in energy savings.

The taxpayer will not benefit from investments in shale gas extraction, for which many professionals predict will not bring down energy prices. We must focus our attention on making the infrastructural investments in the distribution network, including battery storage, and in distributed low cost generation like solar electricity and onshore wind bringing longer term value to our communities.


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