Ofgem to investigate energy firms for missing home efficiency targets

Regulator to look at why British Gas, SSE and Scottish Power failed to reach carbon reduction targets

British Gas, SSE and Scottish Power are among six energy firms to be investigated by the energy regulator Ofgem after failing to deliver enough energy efficiency measures to UK households.

Under the Carbon Emissions Reduction Target (Cert), legislation which was in place until the end of 2012, the big six energy companies had to introduce measures such as installing insulation or switching a household's heating fuel from oil to gas to help reduce UK carbon emissions.

Under a separate smaller scheme, the Community Energy Saving Programme (CESP), the same suppliers had to deliver more complex energy saving measures to people in the most deprived areas of the country.

Both British Gas and SSE failed to meet their targets under either scheme, according to Ofgem, and Scottish Power missed its CESP target. Electricity generation companies GDF Suez/IPM and Intergen also missed both targets.

E.ON, EDF Energy and npower, meanwhile, all met their obligations under both targets.

Sarah Harrison, Ofgem's senior partner in charge of enforcement, said: "At a time of rising energy bills energy efficiency can make a big difference for consumers. The fact that the industry has delivered 99% of its government energy efficiency targets is to be welcomed.

"However, Ofgem's role is to ensure that consumers do not lose out by the failure of firms to deliver all the help required, or are not disadvantaged by late delivery. This is why Ofgem is today launching investigations into six firms who have failed one or more of their energy efficiency targets set by government."

Once it has investigated why the companies missed their targets, the regulator can drop the case, fine them or come to a settlement agreement.

British Gas is potentially in the most trouble as it missed its Cert target by 2% and its CESP target by almost 40%. SSE also missed its Cert target, but this appears to be because it was late in filing its final figures to Ofgem – those figures, now submitted, show it was on target. But it missed its CESP target by 10%.

British Gas had made a final push to meet its Cert obligations at the end of 2012 by offering free loft and cavity wall insulation to customers of any energy firm. However, today's Ofgem figures show its missed its insulation target under Cert by 5%.

Since the end of 2012 some energy companies, including SSE, have continued to offer free or discounted energy efficiency measures to households. Ofgem said it will take these into account when investigating the companies, but that these would not be a substitute for compliance.

The investigation into SSE opens another chapter in a bad year for the supplier. Last month it was fined a record £10.5m by Ofgem for "prolonged and extensive" mis-selling to customers.

All the big six energy suppliers have been accused of "cold-blooded profiteering" after official figures showed they had more than doubled their retail profit margins over the past 18 months and were now earning an average of £95 profit per household on dual fuel bills.

Contributor

Lisa Bachelor

The GuardianTramp

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