To ask the Secretary of State for Energy and Climate Change, with reference to the Answer of 18 April 2016 to Question 32639, how much of the investment in energy efficiency measures referred to was spent on (a) administrative costs and (b) targeted energy efficiency schemes; and what estimate she has made of the amount that will be spent on administrative costs relating to such planned investment in the current Parliament.
25 May 2016
Of the £7.4bn spend last parliament, around £350m was spent by energy suppliers on administration and the remainder (around £7bn) spent on delivery.
Of the £1.8bn estimated to have spent between May 2015 and the end of March 2017 (when ECO is due to end), around £160m is expected to be spent on administration, with the remaining £1.6bn spent on delivery.
The Government has yet to consult on the design of the future supplier obligation replacing ECO, so it is not possible to estimate the administration costs beyond March 2017. However, the consultation is expected to include provisions designed to reduce the cost of administration relative to ECO, freeing up more of the estimated £1.9bn for delivery.
The administration costs are proportionately higher under this parliament, as ECO strengthened the monitoring and reporting requirements for suppliers relative to those under CERT and CESP (which were in operation during the last parliament), to allow more detailed and timely monitoring of suppliers’ progress against their obligations.