黑洞社区

One of the government鈥檚 flagship schemes to boost the energy efficiency of buildings could add 10% to the cost of household energy bills, raising fears of a consumer backlash.

According to a detailed study by sustainability consultant Encraft, the Energy Company Obligation (ECO) - the sister programme to the Green Deal that requires energy companies to install energy efficiency measures - is set to cost more than double the original estimate, with the additional cost set to be picked up by consumers.

The revelation comes in a week when prime minister David Cameron made a speech reasserting the government鈥檚 commitment to the green agenda and underlining the importance of the Green Deal and the ECO in driving energy efficiency uptake.

The ECO was introduced to pick up from previous government energy efficiency subsidy schemes the Carbon Emissions Reduction Target (CERT) and the Community Energy Savings Programme (CESP). Under the obligation, energy companies must deliver 27.7 million tonnes of CO2 savings by 2015. The government has estimated that the firms will have to spend 拢80 per tonne of CO2, resulting in 拢1.3bn of spending each year.

But Encraft鈥檚 study found that the cost was more likely to be 拢180 per tonne of CO2, resulting in spending of 拢2.9bn each year - more than double the government鈥檚 estimate.

Matthew Rhodes, managing director at Encraft, said the Department of Energy and Climate Change鈥檚 (DECC) impact assessment ignored a lot of costs involved in delivering ECO.  

鈥淭hese hidden costs might include refitting kitchens and moving services and even DECC admit this could easily amount to 拢5,000 per project. Our model used much more accurate cost estimates, particularly for internal wall insulation,鈥� he said.

Rhodes said the additional cost to energy companies would likely be levied on consumers鈥� energy bills, with the spending increase equivalent to about a 10% uplift in the price of energy bills.

With energy bills at an all time high 鈥� and the government pitching its energy efficiency programmes as a means to reduce them 鈥� the revelation that the ECO could drive up their cost has sparked concern among industry leaders that the scheme could be hit by a consumer backlash.

Bolstering the government鈥檚 energy efficiency programmes is a key part of 黑洞社区鈥檚 Green for Growth campaign.

Sustainability expert David Strong warned of a 鈥渂ack bench revolution against anything that would suggest a rise in consumer bills鈥�, which could undermine the government鈥檚 commitment to energy efficiency.

Shadow energy minister Luciana Berger said more retrofit work would need to be carried out through the ECO due to the government鈥檚 failure properly to incentivise the Green Deal.

She added that it would be 鈥渨rong鈥� for the public to have to pay more 鈥渂ecause ministers can鈥檛 get their sums right鈥�.

But a spokesperson for DECC said the government had greater powers to monitor costs and how they were passed onto consumers under the new scheme than ever before. 鈥淲e are already seeing that ECO measures can be delivered cost effectively on the ground,鈥� he added.