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Government must do more to show value for money of green energy schemes

News   •   Feb 08, 2017 16:29 GMT

The Government has been criticised over the transparency of energy schemes paid for by bill payers.

The Public Accounts Committee (PAC) have criticised MP’s, as they are yet to receive an annual report on the impact of three policies on energy bills which they were promised in 2014.

Three low carbon energy schemes, which are funded by levies on energy companies and payed for by consumers through their energy bills are supposed to be controlled through the government’s Levy Control Framework.

They have also shared concerns that have gone unanswered regarding over-optimistic forecasting in the Department for Business, Energy and Industrial Strategy (BEIS).

The PAC concluded that the framework had “suffered from a lack of transparency, rigour and accountability” and the forecasting of its costs had been poor.

The three schemes are the “renewable obligation”, “feed-in-tariffs” and “contracts for difference”.

The “renewables obligation” requires energy suppliers to either meet their targets for buying a proportion of their energy from low-carbon generators, or may the extra for any shortfall.

“Feed in tariffs” support small-scale renewable energy generators, while “Contracts for difference” aims to help new low-carbon generators through long-term contracts between them and a government-owned company, which guarantee the generators a set price for electricity.

Committee Chairman Meg Hillier said: “Bill-payers deserve to know whether or not the energy schemes they fund represent good value for money.”

“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.

“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.” she added.

A BEIS spokesperson said that the government would respond to PAC’s recommendations “in due course”, and took action last year to “revise renewable energy subsidies to ensure customers are protected from higher energy bills.

“The strong, decisive action we took reduced projected costs by over £500M to protect people’s household budgets and ensure value for money while delivering more environmentally friendly energy.”

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