Energy Secretary Ed Davey said he is “disappointed” that six energy firms did not meet the efficiency targets set by the Government last year.
British Gas, SSE and Scottish Power were among the companies that missed their targets as revealed by Ofgem today, which is launching an investigation into what happened.
Under two schemes launched by DECC – the Community Energy Saving Programme (CESP) and the Carbon Emissions Reduction Target (CERT) – energy firms had to introduce measures such as insulation and also deliver energy saving installations to people in the most deprived areas in the UK.
According to Ofgem, both British Gas and SSE failed to meet their targets under either scheme 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, however, met all their obligations under both targets.
British Gas missed its CERT target by 2% and its CESP target by almost 40% – the worst of the lot. SSE also missed CESP target by 10%.
Mr Davey said: “I am disappointed that under the old schemes some companies failed to meet their obligations. Ofgem will be conducting a thorough investigation and will take any necessary enforcement action. We are already acting through the Energy Bill to give Ofgem the teeth it needs in future to get compensation to those directly affected.”
However, Energy UK, the trade body for energy firms, said 99% of the targets that were met ensured millions of households had lower bills.
Chief Executive Angela Knight said: The tremendously hard work involved in the CERT and CESP programme means customers have saved hundreds of pounds off their energy bills. We look forward to having a constructive dialogue with Government and Ofgem on what worked well and what could be improved so that future programmes are properly planned and considered before they are brought in. Binding obligations must also be fair to all companies to allow them to deliver benefits to consumers in the most cost effective manner possible.”
Consumer group Which? supported Ofgem’s announcement that it would take action against the firms who haven’t met their targets.
Executive Director Richard Lloyd added: “Consumers pay for these schemes through their energy bills and so have a right to know how much they are costing. We want the Government to ensure that there is full transparency on the costs of the new Energy Company Obligation (ECO) so we can judge if they are delivering real value for money.”