Boiler Scrappage Scheme Closes To New Applications

(Guardian) – THE GOVERNMENT’S boiler scrappage scheme, which offered £400 to householders to encourage them to upgrade to a more energy-efficient central heating scheme, has closed to new applications after running out of money.

The scheme, launched in January, was aimed at cutting carbon emissions as well as helping people save money on their energy bills.

Up to 125,000 households in England with working boilers with the lowest “G” rating were able to apply for vouchers from the Energy Saving Trust, which they could put towards buying an A-rated boiler or installing a renewable heating system such as a biomass boiler or heat pump.

This afternoon the government announced that all 125,000 vouchers had been taken up and that the scheme is now closed.

“The scheme’s been a great success and is already helping people cut down on their fuel bills. An ‘A-rated’ energy-efficient boiler can help save around £200 a year off fuel bills and reduce emissions,” said Lord Hunt, energy and climate change minister.

“The scheme has also provided a much needed boost to England’s plumbers and boiler manufacturers, helping to sustain work for the 130,000 installers and up to 25 UK-based boiler manufacturers throughout the economic recovery.”

Some energy suppliers will continue to run their own promotional schemes.

Over the past two months, all the major energy companies which sell and install boilers (British Gas, E.On, npower and Scottish & Southern) have matched the government’s offer, giving householders potentially a total of £800 off the cost of a new efficient boiler and some boiler manufacturers are also offering deals.

NPower confirmed today that it would continue with its own scheme – it differs from the government’s in that customers only have to have a boiler that is over 10 years old to be eligible to receive a £400 discount.

Recently published figures from the Energy Savings Trust show that, as at 16 March, 118,785 vouchers had been allocated and 35,390 boilers had been installed. Since then the full allocation of vouchers has been taken up.

People have up to 12 weeks after receiving their voucher to have the work done. A spokeswoman for the Department of Energy and Climate Change said there were no plans to reopen the scheme at the moment or to reissue any unused vouchers.

British Gas Cuts Prices By 7%

(Guardian) – BRITISH GAS today announced it was cutting residential gas prices by an average of 7% with immediate effect, in a move that will put pressure on other suppliers to follow suit.

The company, which is the UK’s biggest provider, said the price cut would benefit 8 million customers and save the average household £55 a year. This is the third time the energy giant has cut prices in the past 12 months, and it claimed it was now the country’s cheapest major supplier of gas and dual fuel packages.

At the same time, it said it was removing the premium it charges customers on pre-payment gas meters so they will now pay, on average, the same for their energy as those who pay by cash or cheque.

Customers who have recently signed up to British Gas’s fixed-rate Price Guarantee March 2011 tariff will also see prices fall.

Higher pricing for pre-payment customers, typically poorer households, has long been criticised by charities and consumer groups for aggravating the problem of fuel poverty.

Families Face Shock 20% Rise In Heating Bills

(Daily Mail) – FAMILIES face record winter gas bills averaging £360 as power companies reap a huge windfall from the big freeze.

The ‘big six’ energy suppliers have refused to pass on a steep fall in wholesale prices to customers.

They are collecting a profit bonanza of £846million in a single month by charging over the odds to keep homes warm.

Householders have had no choice but to turn up the heat to cope with the coldest spell in 30 years, with snow and ice blanketing the entire country.

Domestic demand for gas over the last month is predicted to be 60 per cent higher than in a normal winter.

This increased consumption will result in average bills of £360 for the three-month period from November through to the end of January, compared with £300 a year ago.

Greedy suppliers decided to reduce the tariff to customers by less than 10 per cent – even though the wholesale price of gas came down by some 60 per cent between 2008 and 2009.

Separately, heating oil companies, which provide fuel to thousands of rural communities, have been accused of putting up their prices by more than 50 per cent since November.

The evidence of apparent profiteering has brought calls from consumer groups and MPs for inquiries by both the Competition Commission and the Office of Fair Trading.

At the same time, there is a mounting clamour for a windfall tax from pensioner groups, Labour MPs, unions, think tanks and the Local Government Association, which represents councils from all parties.

Analysts at the TheEnergyShop.com suggest the bill in the coldest period over Christmas and New Year would have been at least £36 lower if suppliers had cut their prices by a further 10 per cent, as they easily could, before the winter began.

Multiplying this across the nation’s 23.5million households suggests the big six – British Gas, Scottish & Southern Energy (SSE), RWE nPower, Eon, EDF and Scottish Power – are making an extra £846million in a month.

British Gas is on course for a rise of more than 50 per cent in annual profits

SSE recently revealed a 36 per cent increase in profits for the period before the temperatures plummeted. UK suppliers owned by German, French and Spanish firms are enjoying a similar bonanza.

Andrew Hallett, energy expert at the official customer body, Consumer Focus, said: ‘As energy firms failed to fully pass on wholesale price cuts before winter they will be cashing in on the cold snap.

‘Consumers are paying over the odds for their increased heating needs, giving a profits boost to suppliers.’

Joe Malinowski, founder of TheEnergyShop.com, said: ‘This year’s record winter bills will come as a real shock to many people particularly when you consider that wholesale gas prices fell by over 30 per cent in 2009 and are 60 per cent lower than their 2008 peak.

‘In freezing conditions, turning down the heating is not always an option.’

Apart from the cost, there is a real threat to the health of elderly customers who are too scared to turn on their heating. It is feared the cold temperatures, which exacerbate many underlying health problems, could contribute to some 60,000 deaths.

The National Pensioners’ Convention said: ‘We know that energy firms are quick to put up prices yet very slow to bring in the reductions.

‘Energy companies, particularly in this cold winter, will be making huge profits out of very vulnerable customers. That raises the serious question as to whether they should pay money back through a windfall tax to fund things like home insulation.’

The Local Government Association has argued the need to raise an extra £500million a year for ten years from both oil and gas firms to fund a massive home insulation scheme.

Christine McGourty, director of Energy UK, which represents the major gas and electricity suppliers, rejected allegations of profiteering and advised anyone struggling with bills to contact the supplier for help.

She said much of the gas being used this winter was bought up to two years ago, when wholesale prices were higher.

Factories’ Gas Cut Off As Demand Soars

(Telegraph) – FACTORIES AND POWER STATIONS have started to have their gas turned off as Britain begins to run out amid the prolonged Arctic weather conditions.

The National Grid has withdrawn supplies to 94 “very large” gas customers across England, 55 in the East Midlands and 39 in the North West.

It is the first time in 11 years that gas supplies have been cut, and came as gas demand was expected to reach a record high of 454 million cubic metres on Thursday.

All the customers, which the National Grid said include “steelworks, power stations and very large factories”, are on what are known as interruptible contracts.

This means that in return for discounted gas they accept that their supplies can be temporarily cut off during periods of high demand.

A National Grid spokesman said the last time interruptible contracts were invoked was 1999.

She said many customers on interruptible contracts had backup generators, but those without them would have to shut down.

They also had the option of continuing their supply if they paid a financial penalty.

The National Grid asked gas suppliers to cut the 94 customers off on Tuesday and the disconnection will last until demand falls.

With little sign of any change in the weather soon, reconnection could be weeks away.

Maintaining domestic gas supplies was a “top priority”, the spokesman stressed.

Earlier this week the Conservatives claimed that Britain had only eight days’ gas supplies left, based on current usage.

And on Thursday the National Grid issued its second gas alert in four days amid freezing temperatures nationwide.

Britain has poor gas storage capacity: only 15 days’ worth when full, compared to more than four times that in France and Germany.

While imports will plug the gap, they are more expensive and analysts have warned they could lead to higher bills.

Already the average annual energy bill stands at £1,239 according to uswitch.com, a price comparison site.

David Hunter, of McKinnon and Clarke, an energy consultancy, has said the “uncomfortably tight” gas situation “might give the energy companies the excuse they need to increase prices.”

Consumers Face Hike In Energy Bills

(Reuters) – CONSUMERS COULD SEE THEIR ENERGY BILLS rise by up to a quarter over the next 10 years as Britain faces a requirement to invest £200 billion to secure supplies and meet climate change targets.

Energy regulator Ofgem said today the investment would be needed to pay for new power plants and other infrastructure.

‘Given the massive levels of investment needed, there is a high likelihood of rising consumer bills, especially if oil and gas prices continue their underlying rise since 2003,’ Ofgem said following a review of Britain’s energy supplies.

The regulator said customers could face increases in domestic energy bills of between 14% and 25% by 2020, while wholesale price spikes could lead to temporary increases in bills of up to 60% in the interim period.

Ofgem said Britain faces a number of challenges to its gas and electricity supplies over the next ten to fifteen years including power stations nearing the ends of their lives and an increasing need to import gas via volatile global markets.

‘These are big challenges. Britain faces a tough challenge in maintaining secure supplies whilst at the same time meeting its climate change targets,’ said Ofgem chief executive Alistair Buchanan.

Shadow Energy Secretary Greg Clark said the country faces a combination of price rises and worries that power supplies are going to be interrupted.

‘It’s yet another piece of evidence that we face a real problem here. It’s really a horror show,’ he said.

Britain’s main gas and electricity suppliers are Centrica, EDF, E.ON, RWE, Iberdrola’s Scottish Power, and Scottish & Southern Energy.

Ofgem said it will put forward proposals in the new year on how the industry can meet the challenges following a consultation period.

Ofgem Forces Clarity On Direct Debits

(Reuters) – OFGEM WILL INTRODUCE new conditions on utilities to ensure direct debit payments are accurately set and explained to customers, the energy regulator said today.

Ofgem produced a study in March which found energy companies were inadequately explaining increased charges to its customers.

‘The proposed licence condition will help give customers peace of mind that the amount they are being asked to pay is based on their likely energy use,’ chief executive Alistair Buchanan said in a statement.

Ofgem said the new measures, expected to be in place by winter 2009, will also make companies explain why they were holding onto credit surpluses built up by customers.

In a separate move, Ofgem confirmed it will ban unjustified price difference for customers using pre-payment metres or off the gas grid from September 1st.

The practice was highlighted in Ofgem’s retail probe last year. Energy suppliers have already removed £300 million of unfair price premiums, the regulator said.

Ofgem was also in the final consultation stage of other measures stemming from the retail probe, that could include tougher rules on doorstep sales and a new annual report on energy use and cost for customers.

Britain’s biggest energy suppliers are British Gas owner Centrica, ScottishPower, RWE npower, EON UK, Scottish and Southern Energy and EDF Energy.