Memorandum submitted by RWE npower (EEFP
10)
RWE NPOWER
RWE npower has a diverse portfolio of generation
capacity in the UK. npower is its retail energy supply business
with over 6.5 million residential customers.
RWE npower welcomes the Committee's inquiry
into the connected but distinct topics of energy efficiency and
fuel poverty.
SUBMISSION
Energy efficiency and carbon reduction
Government policy from 2011-20 proposes a supplier
obligation, one option being a cap on suppliers, limiting the
amount of energy they supply. This would result in suppliers selling
fewer units, focusing on selling energy service packages to make
profits. These would comprise, inter alia, energy efficient
measures, which under the existing obligations of CERT can be
free or heavily subsidised. This will require changes in consumer
behaviour: that they become more energy aware, value such packages
and are prepared to pay a market rate for them. Additionally,
energy efficiency may be more effective if approached through
legislation (for example, tax incentives, more stringent buildings
regulations or proscribing energy inefficient equipment).
We would ask the Committee to examine:
(i) The maximum credible contribution of energy
efficiency to Government's carbon reduction targets.
(ii) What steps the government needs to take
to stimulate consumer pull for energy efficiency measures, moving
to an energy services market which does not depend on extensive
subsidies?
(iii) Whether, and if so how, the transition
should be made from an input-based to an output based supplier
obligation regime?
(iv) Whether the focus of measures should be
on carbon-saving or energy efficiency. If the former, how should
any consumer measures link with measures to de-carbonize upstream
generation?
(v) The impact on energy efficiency measures
and targets arising from an increased use of (low-carbon) electricity
to de-carbonize other sectors, e.g. transport.
(vi) The scope for personal carbon allowances
and whether these could replace a supplier obligation.
(vii) How consumers can be made to become more
energy aware and hence efficient?
FUEL POVERTY
Fuel poverty should be considered as part of
a wider societal debate on poverty in general. As such, it may
be easier for Government to develop a long-term coherent framework
to meet the 2010 and 2016 targets. At the moment, Defra, BERR,
Treasury, DWP as well as Ofgem have each taken a role in dealing
with fuel poverty. It is unclear which Government department has
primacy.
Government has attempted to use various proxy
targets as a surrogate for the "fuel poor": for example
the over-70s or prepayment meter customers etc. None accurately
meets the definition used by Government in its fuel poverty strategy.
We would ask the Committee to examine:
(i) The extent to which the Government has reduced
its own support for fuel poverty measures over recent years.
(ii) What steps Government could take to help
reduce fuel poverty (e.g. data sharing to improve the targeting
of suppliers' measures, extending fuel direct and focusing Winter
Fuel Payments on those who need it)?
(iii) The benefits of separating fuel poverty
targets from energy efficiency targets.
(iv) The impact of the cost of environmental
improvement measures on the numbers in fuel poverty.
(v) The appropriate balance between Government
support for the poor and that provided by industry (including
the housing, food, water, and energy industries).
(vi) Establishing a coherent cross-government
and industry working party to look at a long term sustainable
approach to poverty.
RWE npower
March 2008
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