Energy News

Budget 2010: New energy plans for the UK

Thursday, 25 March 2010

By Daniel Barnes- daniel@consumerchoices.co.uk

The Budget highlights concerns over energy bills with new plans for sustainable energy.

Alistair Darling announced yesterday plans for £2 billion investment in new green energy in the Budget.

The chancellor revealed a new Green Investment Bank with £2 billion to invest in green technology, part funded by the sale of government assets and part funded by the private sector.

The Budget Red Book also included further details of the chances for households to invest in green technology for their homes and pay for the improvements through their energy bills.

Mr Darling said: “Improving our infrastructure also requires us to renew and modernise our energy supplies.

“We need to take long-term decisions to secure our supplies, while moving to a low-carbon economy.”

Plans for the ‘Pay As You Save’ (PAYS) eco-home improvement scheme were also brought forward.

The Red Book stated: “This will enable millions of households to finance the cost of installations from the savings they make on their energy bills.”

Work is going ahead between the government and the financial services sector on how to fund the PAYS scheme.

Along side the Budget, a new Energy Market Assessment was launched.

The report reveals 18% of UK energy customers now switch companies each year, and more people switch companies than for any other service except car insurance.

However, the document raises questions over competition between the ‘big six’ energy firms.

While the assessment states “evidence to date does not suggest that energy companies have been making excess profits”, it also highlights problems.

It raises problems of energy firms’ prices rising and falling together.

“There does appear to be a consistent pattern to the order in which the six major domestic retail suppliers pass wholesale price changes through to consumers, which could suggest that suppliers feel little pressure to take risks in order to maintain or grow their market share.

“This ‘price following’ behaviour suggests that competitive pressure is not as strong as it could be. There are also a number of other signs that the market is not functioning as dynamically as it could.”

The Budget also revealed over 2.8 million homes have received financial help to cover the costs of insulation since April 2008 and since the start of the year 118,000 households taken advantage of the boiler scrappage scheme.

In the last year 198,000 households have received heating systems, insulation and other help from the Warm Front scheme.