Davey calls on energy firms to be transparent on ECO costs

Energy secretary Ed Davey has demanded greater transparency from energy companies over the cost of the Energy Companies Obligation retrofit scheme.

The government is reviewing the scheme and a consultation on its plans to cut back the Energy Companies Obligation (ECO) concluded last week.

The government’s cuts, which came after concerted pressure from energy companies, which blamed ECO for the rising cost of energy bills, are expected to wipe £900m off the value of the scheme and lead to 14,000 fewer energy efficiency jobs being created over the next three years.

By making the costs of eco clearer, we can make sure they work for the consumer

Spokesperson, Energy UK

Last week, the energy secretary wrote to the energy companies to say the information they had provided so far as part of the review of ECO was “helpful”, but it had “not been sufficient to provide the solid evidence base that is needed when reviewing the operation and effect of the ECO”.

He said he wanted to see greater transparency and called for energy companies to publish large tracts of information on how the scheme was running, including “contracts for future delivery, including price and volumes”.

The information he demanded also included the delivery costs incurred by the firms; administrative costs incurred; the proportion of consumer bills attributable to ECO; and how forecasted ECO costs have been and are factored into firms’ pricing.

Davey added: “I am keen that there should be as much public transparency as possible on these issues, and I will continue to consider how this can best be achieved, particularly in the short term.”

Davey asked the energy firms to set out what information they would “not be content to have published”.

Richard Twinn, policy officer at UK Green Building Council, said it was “in the best interests” of the industry that information on the cost of ECO was “as open and transparent as possible”.

He added: “This is now more important than ever as the consultation on the future of the policy closes and the government decides where savings can be made from the scheme.”

However, one construction industry source in the energy efficiency market said it was likely firms would be “uncomfortable” with the government publishing the details of how their contracts for energy efficiency work were priced.

A spokesperson for Energy UK, a trade association for the energy firms, said: “By making the costs and logistics of ECO clearer, we can better inform future energy efficiency schemes and make sure that they work for the consumer.”