MPs criticise government over green energy schemes

Posted On: 
8th February 2017

MPs have hit out at ministers over a lack of transparency about consumer-funded levies to promote green energy.

The PAC said ministers have yet to reveal a report on how policies are working
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The Public Accounts Committee (PAC) said it was promised an annual report on the impact of these policies on energy bills in 2014, but that none had yet materialised.

The Levy Control Framework is intended to manage the cost of three low-carbon generation schemes, funded by levies on energy companies which pass on the costs to consumers through their energy bills.

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MPs said the Department for Business, Energy and Industrial Strategy (BEIS) "significantly underestimated" the costs of the three schemes.

As a result, the committee said consumers would foot the bill, with the cost of the three schemes set to rise to £110 per household per year from 2020, £17 more than planned.

The MPs also noted concern of a “culture of optimism bias” in the department, having previously highlighted “wildly optimistic” forecasts of demand for Green Deal loans last year.

Meg Hillier MP, chair of the PAC, said today: “Bill-payers deserve to know whether or not the energy schemes they fund represent good value.

“The Government has failed to meet its commitment to report annually on the impact these policies are having on bills. Current arrangements just aren’t good enough.

“At the same time, the Government expects the cost of levies to continue to bust the budget – meaning customers will pay more than expected.

“This is a result of poor forecasting and further evidence of excessive optimism in the implementation of energy policy.

“Government must take action to address this and also ensure customers can see clearly what they are paying towards existing and future schemes through their bills.”