Green energy plans will not help fuel poverty, claims charity

Flaws in the government's proposals come under fire from National Energy Action, the Conservatives and the industry

Ashley Seager
guardian.co.uk, Thursday 16 July 2009 20.33 BST

The charity National Energy Action (NEA) criticised the government for watering down its promise to introduce "social" energy tariffs in its low carbon white paper, saying only a fraction of poor people would benefit.
The NEA, which campaigns on fuel poverty issues, said it was also concerned that funding for the existing Warm Front scheme to help poorer households would be halved next year.
Its chief, Jenny Saunders, said: "NEA has been pressing hard for a social mandate on energy tariffs and we are pleased that the government has included this in its low carbon transition plan. But we are concerned at … the potential narrowing of assistance to pensioner households when millions of low income families are also in fuel poverty and need access to lower tariffs and protection from rising prices.
"And while the white paper recognises the importance of Warm Front in assisting vulnerable households, NEA is concerned the reduction of funding for the next year has not been addressed, which will lead to 50% fewer households being assisted."
There are an estimated 5 million people in Britain living in so-called "fuel poverty" – defined as people who spend more than 10% of their income on fuel and light.
The Tories said ministers had not been honest about the social costs of their low carbon transition, though the party broadly supports the policies. "[Energy secretary] Ed Miliband has deliberately disguised this and has not been honest that it could cost some people more than others," the shadow energy and climate change secretary, Greg Clark, said.
He also said that because of Labour's almost total inaction in the area of renewable energy over the past decade, the costs of a dash to sustainable energy would now be higher than they had to be, and it would probably mainly benefit foreign firms, who would rush in to fill the void as the domestic renewable energy industry struggled to catch up with demand.
The Department of Energy and Climate Change rejected the claims. "The government is providing immediate help for households to make energy savings and reduce bills, and since 2000 has spent £20bn on helping people in fuel poverty", a spokesman said. "We're determined to minimise the impacts on the poorest in society – which is why we're reforming the system of social tariffs to allow the most vulnerable to receive compulsory support from the energy companies and increasing the amount spent."
A key part of the government's plans is the so-called "clean energy cashback" which is a more user friendly name than the "feed-in tariff" label used in most the national grid. They have been used to great success in other countries and are the model the British government wants to follow.
But renewables companies, which have been considering the numbers since the proposed tariff levels were published on Wednesday, were disappointed. The government claims its tariffs are designed to give investment returns of between 5% and 8%, lower than those offered by many other countries' tariffs. But Solar Century, one of Britain's leading solar energy groups, claims the return is more like 4% on photovoltaics – leaving a long payback time and hardly providing an incentive for households or businesses to invest.
Executive chairman Jeremy Leggett said: "The government has accepted solar PV can make a significant contribution to our future energy needs. It's unfortunate that the consultation numbers, if confirmed later this year, will do little to boost demand for non-domestic solar PV."