Energy firms sitting on £1bn for green measures as their profits rise by 77%

The big six energy firms have taken £1bn from their customers for green measures but have completed a fraction of the work.

Figures from the regulator Ofgem showed that companies had achieved as little as 3% of the measures to be carried out under the Energy Companies Obligation (ECO) which they are they are supposed to pay for solid and cavity wall insulation, particularly for people on low incomes or with hard-to-insulate properties. Companies had achieved 16% of what they needed to do to help rural areas and put in district heating systems, and 25% of the target on measures that reduce the overall cost of home heating for low-income and vulnerable households, including new boilers.

Andrew Warren, director of the Association for the Conservation of Energy, said: “They have collected £1bn and spent a small proportion of it. This is cynical price-gouging by the big energy companies. We are discussing social obligations here, not a green tax. These companies are blaming ECO for rising energy bills, but they haven’t been carrying out [the number of installations needed].”

The ECO has become the focus of the debate over energy bills, as one of the targets for David Cameron’s pledge to “roll back” some of the additions to bills that pay for green and energy efficiency measures.

Energy firms receive £1bn for green measures before they are carried out

In other news the big six energy companies made £53 profit per customer before latest price rises – up from £30 a year earlier.

Ofgem said the profit per household had risen from £30 in 2011 to £53 in 2012, driven by higher prices and increased demand for heating during last year’s winter snap.

The average profit margin for supplying energy to households in 2012 was 4.3%, up from 2.8% in 2011, with total profits from supplying energy to households and businesses rising from £1.25bn to £1.6bn last year.

Energy firms’ profit from customers has risen 77% in a year, says Ofgem

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