Green groups have backed Charles Hendry’s announcement today that energy firms who have less than 250,000 customers will benefit from not having to take part in the Carbon Emissions Reduction Target and the Community Energy Saving Programme.

Barney Rhys Jones, Managing Director at Good Energy said: “Good Energy is pleased that the Government recognises the need to encourage competition in the energy market, which will benefit consumers as well as suppliers.

Paul Steedman, campaigner at Friends of the Earth agreed: “To get the investment we need in renewable energy and energy efficiency at an affordable price we need lots of new players in the market, so we welcome incentives for smaller suppliers.”

However Mr Steedman said that the Government needed to prioritise what was most important: “If the Government is serious about opening up energy supply it should reverse its disastrous decision on solar Feed In Tariffs and deliver market reform that will actually support local, renewable energy production, rather than welfare for the Big Six and centralised nuclear and fossil fuel power plants.”