Ministers ‘fail to monitor whether green energy levies work’, National Audit …

November 28, 2013 by  
Filed under Green Energy News

But the board in charge of controlling spending has “not sought to identify
the best combination of outcomes and affordability within that cap”, the NAO
said.

The levy control board “has focused on cost control and not the associated
impacts on energy policy outcomes”, it said, adding this was “contrary to
its terms of reference”. For example, it would monitor how new wind farms
affected bill levies but not “the resulting progress towards
decarbonisation”.

The Department of Energy and Climate Change (DECC) say the combined cost of
all their policies is currently about £112 on a typical household energy
bill and will rise to £191 in 2020. Only £90 of this 2020 total will
actually be counted in the LCF, however, as the cap does not cover all
policy costs paid for on bills.

Controversial energy efficiency schemes are excluded from the LCF – despite
the fact the NAO said they could “reasonably be regarded as a levy”. There
was no clear rationale for determining which schemes counted as levies, it
said.

“As consumer-funded spending increases and new schemes are introduced, [DECC]
needs to assure Parliament and the public that it has robust arrangements to
monitor, control and report on all consumer-funded spending, and the
outcomes it is intended to secure.”

DECC was yet to “define clearly the future scope” of the cap, the NAO added.
“Investors seek transparency over the scope and scale of any caps on funding
to give them confidence in the support available for potential investments.”

It warned that DECC may have underestimated the costs of a subsidy scheme that
funds solar panels on houses and disclosed that while DECC believed the LCF
would be enough to fund meeting green targets, it had also modelled
scenarios where the cap was breached. It has not published these and will
not say the likelihood the cap is exceeded.

A DECC spokesman said: “The NAO report is supportive of the work Government is
doing to control costs for consumers and concludes that the Levy Control
Framework (LCF) is providing certainty to investors.

“The LCF helps fund investment in renewable energy as well as support for
vulnerable and elderly through the Warm Home Discount.

“Government monitors and controls expenditure on schemes that are funded by
consumer bills very carefully.

Energy and climate change policies, will reduce household energy bills in the
long-run, with bills being on average 11%, or £166, lower than they would
otherwise be in 2020.”

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