Energy efficiency may not be all it seems

12 September 2008 / by Rebecca Sargent
Despite receiving a warm welcome yesterday, the Government's proposed measures to combat fuel poverty have come into question from various angles.

As it stands the proposal will inject just short of £1billion into banishing fuel poverty, most of which will go towards an energy efficiency drive that will focus on insulation. However, industry experts have called into doubt exactly how many people this will help and how effective it will be.

The money has been raised from gas and electricity providers and producers Gordon Brown announced yesterday, confident that this will not be reflected in customer's bills. This again has come into question.

According to reports today, there is currently no way to stop energy companies from continuing to increase their prices. And there can be no guarantees until regulator Ofgem's enquiry into their pricing behaviour decides once and for all whether they have played fair or not.

Speaking of the Government's proposals, David Porter, chief executive of the Association of Electricity Producers, said: "Electricity producers operate in a competitive wholesale market and companies may have to absorb the extra costs of the Government's scheme.

"The whole proposal needs careful examination and we look forward to a consultation."

And, as the possibility of gas and electricity bills increasing further becomes real, the figures of the proposals are being hit by doubt. has warned that the sums must add up, but there is already industry input that suggests they do not.

Speaking just before the measures were officially announced, director of consumer policy at, Ann Robinson, said: "The yardstick to use when judging the effectiveness of these measures is very simple – price rises have added £380 to the average household bill so far this year. How much will be shaved off again through energy efficiency and by when?

"5.4 million households are now struggling with fuel poverty – how many will be helped back out of the net again and by when? Consumers will want to see these sums add up if the Government's solution is to have any credibility."

And, as expected, the figures did come into question at the press conference yesterday, where the Prime Minister was asked exactly how many people would be able to benefit from the insulation measures in the next few weeks.

However, the answer has been damned today in the press as unsatisfactory. In response to the question, Hilary Benn MP said, "Part of the answer to the question, it depends how people come forward, but the offer is very, very clear: for pensioners, for people on low incomes and other benefits, the loft and cavity wall insulation is available for free, for others at 50 per cent of the cost that you would otherwise pay, and we are working with energy companies to build capacity."

According to Gordon Brown, households who do receive the help will save as much as £300 from their annual fuel bill and two million homes will be insulated each year.

However, according to reports today, industry experts doubt how many will feasibly receive help this winter. A National Insulation Association (NIA) spokesperson told the Telegraph that with around 5,000 insulation technicians in the UK, the industry is currently only able to install one million households with insulation each year, implying that far less than this will be helped before this winter sets in.

© Fair Investment Company Ltd