The Public Accounts Committee (PAC) has called on the government to do more to demonstrate the actual value for money of green energy schemes paid for by bill payers.
The Levy Control Framework was introduced to control the cost of three low-carbon generation schemes, funded by levies on energy companies, which consumers pay for through their energy bills. However, the PAC has concluded that the framework is suffering ‘from a lack of transparency, rigour and accountability’.
There are currently three green energy schemes in distribution: the ‘renewables obligation’, which requires energy suppliers to either meet targets for buying a proportion of their energy from low-carbon generators, or pay a fee for any shortfall; ‘feed-in tariffs’, which support small-scale renewable energy generators; and ‘contracts for difference’, which helps new low-carbon generators through long-term contracts between them and a government-owned company, which guarantee the generators a set price for electricity.
The report stated: "In July 2014 government agreed to provide Parliament with an annual report on the impact of policies on energy bills, but has not done so since 2014.
The consumer-funded policies report which the Department published a few days before our evidence session on the Framework is not an adequate substitute for a full report on consumer bills: for example, it does not show the net impact of policies once cost-saving effects are included."
Committee chairman Meg Hillier commented: "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.”