Energy firms 'to get £2bn from green levies'
The UK's biggest energy suppliers are on track to share a bumper £2 billion windfall following the government's decision to reduce green levies.
That's according to a new report from the Insulated Render and Cladding Association (Inca), whose research suggests that ministers have miscalculated how much energy companies should give back to consumers following recent moves to water down the Energy Company Obligation (ECO) scheme.
It was initially estimated that, as a result of the money they would be saving through the scaling back of the home insulation scheme, suppliers should pay consumers back by reducing their bills by £35 a year.
However, this latest report from Inca suggests that the government move will save the biggest companies more than was initially anticipated, so unless they pass these bigger savings on to their customers, or unless they use the extra money to invest in renewables, they will be pocketing as much as £2 billion over the next three years.
In an open letter to the Prime Minister, the trade group noted: "The actual savings to the 'Big Six’ go far beyond the £35 you have persuaded them to give back to customers, representing a £1bn-£2bn windfall to energy suppliers over the next three years."
Following the letter's publication, opposition MPs have called on the government to re-think its plans, arguing that consumers, many of whom are currently struggling with their energy bills, should feel the benefit of the money being saved by the changes to the ECO initiative.
At the same time, however, the energy suppliers, represented by Energy UK, have countered that the original calculations were made using the "best estimates" of both the government and the companies themselves.
The industry body added: "The cost of delivering ECO will vary from company to company but the industry welcomes further transparency to make ECO more open and easy to understand."
Meanwhile, a new report from the think tank IPPR has warned that annual energy bills are due to rise by £127 by 2020, around double the rate the government has predicted.