The United Kingdom’s largest energy retailer, Centric, has criticized a green energy government policy whose aim is to ensure that houses are more energy efficient, claiming that the plan is inefficient and more expensive than the government had projected. Centrica’s Chief Executive officer, Sam Laidlaw has called for the policy, which requires funding of home improvements that are energy efficient be done by the power suppliers, to be overhauled claiming that it is more costly less proficient than the scheme that it seeks to replace.
While speaking to the Financial Times, Sam Laidlaw said that they would like to sit with the government down so that they would agree on whether the plan is the most effective in terms of cost when it comes to the reduction of carbon emissions by the customers. The company also wants to know whether the government’s green energy plan can be changed with an aim to bringing down the cost. During one of his earlier attacks made publicly to the government on the green policies, the Centrica CEO said that the scheme, Energy Company Obligation (Eco), was expensive to administer and that it was complicated.
In the policy, the cost it takes for carbon abatement is about £100 to £120 per tonne of carbon and for the earlier scheme, which was known as Cert, the cost was £25 to £30 for the same amount. If this new scheme is thus to be implemented, Mr. Laidlaw says that the environmental costs for Centrica will increase by £100 million this year alone. These comments about the scheme from Centrica coincide with similar ones from RWE npower, another one of the top six largest energy suppliers, with the company warning that household bills would increase due to the high Eco costs.
When Eco was being formulated, its main purpose was to address the infamous incompetence that rocked the ageing housing stock of Britain. According to Centrica’s estimates, £1 out of every £4 spent in Britain on heating bills goes to waste due to poor insulation. Further estimates also show that almost 12 million homes lack adequate cavity or loft wall for insulation. However, even with the important intended purpose, energy companies have continued to complain that the cost will be higher than the estimated £1.3 billion a year. RWE npower estimates that the scheme’s cost will be about £1.8 billion.
In its defense, the Department of Energy and Climate Change has said that there exists no evidence to show that they should change the estimates of the plan. It further said that there was no sense in comparing Eco’s cost with that of Cert as the two schemes were designed very differently and that over the years, there has been significant change in carbon opportunities in the world. This has however not satisfied the energy companies though their criticism comes at a time where they are being scrutinized due to the rising energy prices. The companies have raised concerns with the fact that Eco is meant to run together with Green Deal, another government project where consumers are given an opportunity to take loans for home improvement to be repaid back through their electricity bills’ surcharge.