Eon boss ‘frustrated’ by lack of funding to reduce energy demand

Eon Energy boss Michael Lewis says he is “frustrated” by a lack of new funding to support energy demand reduction, following the chancellor’s latest budget.

While welcoming the extension of the £2,500 Energy Price Guarantee (EPG) for three months beyond 1 April, Lewis criticised the lack of a longer term plan to reduce energy consumption and cut bills.

He said: “A £500 rise in average bills, coupled with the end of the £400 Energy Bills Support Scheme, would have been an unbearable extra burden for a great many people. The government should be commended for listening to those concerns and responding with this measure. By the same measure we’re pleased that customers with a prepayment meter will no longer pay a premium and will instead pay charges comparable to direct debit customers.

“Energy prices are still double what they were in 2020 and remain unaffordable for many. Our concern is that families will still need help next winter if wholesale prices stay the same and there is nothing in today’s budget that signals a longer term plan to reduce energy consumption and cut bills.

“Solving this issue in a sustainable way means providing targeted support to those who need it most, for example pensioners and those on certain means-tested or disability benefits.”

The Eon chief said he agreed with recent proposals for a social tariff based around the principle of a rebate. This, he said, should be developed and be in place for next spring.

“Ahead of this, I will continue to urge government to ensure a new short term targeted energy bill support scheme is operational by the winter of 2023 so people are not hit as hard as they might otherwise be,” he added.

Meanwhile, Lewis reiterated calls for more investment in energy efficiency as part of the longer term solution, as well as investment in home-generation.

“I am frustrated that new funding to support energy demand reduction is missing from today’s budget as we all know energy efficiency is the best investment for the country when households are struggling: it makes homes more comfortable, relieves pressure on our health service, cuts energy costs, grows the economy with new green collar jobs, and contributes to net zero on a sustainable basis,” he said.

Elsewhere in the sector charities have welcomed the extension of the EPG but have raised concerns about the Energy Bill Support Scheme ending.

Speaking to Utility Week, National Energy Association (NEA)’s director of policy and advocacy Peter Smith explained what the charity wants to see going forwards.

He said: “We want the welcome changes that have been made for prepayment customers, who are no longer paying a premium in the energy market, to be applied to standard credit customers who pay by cheque or cash. Those households pay a much dearer premium in the energy market, currently about £250 more than direct debit customers. We want to see that extended to those households.

“We also want to see some further cost of living support payments made to households that will fall through the gaps. We know, for example, carers, those households on bereavement allowance and many people that aren’t on Universal Credit but are disabled or have medical dependencies in their home aren’t well suited to those cost of living payments and we are urging the government to look at what more could be done there.

“Overall, we are going to be looking to make the most of the opportunities to re-wild the energy market and provide much more affordable energy tariffs and we will input in full into the government’s upcoming consultation on what support is available post-April next year.”

Clare Moriarty, chief executive of Citizens Advice, added: “This welcome step will protect millions of people from unaffordable energy bills.

“Unfortunately it’s not all good news. The withdrawal of the Energy Bill Support Scheme will still mean the average monthly bill rises by £67 from April.

“With millions already unable to afford their bills and energy prices set to remain high in the years ahead, the government must now look at long-term solutions to this problem. Many people, especially those on low incomes, will need ongoing support not only to pay their bills but to make their homes safer and warmer through improved energy efficiency.”