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Consumers May Have to Foot the Bill for Levy Cap Overshoot

  • Publish Date: Posted over 7 years ago

Former government ministers helped to contribute to a billion-pound overspend on green energy subsidies, according to a new government report. The result will be that consumers are left to pick up the bill.

The review was carried out by the new Department for Business, Energy and Industrial Strategy, and it found that unwillingness at a political level - especially for wind and solar - meant that the green energy subsidies cap was breached by over £1 billion.

It also found that the former government's inability to remain under the cap was partially due to a mentality of 'group think' - both within the old DECC and the consultancies that they employed. Other failings were found to be due to poor forecasting and management and a lack of transparency. The result was that the huge overspend wasn't detected until 'too late'.

Energy Secretary Ed Davey appeared to be criticised in the report for failing to act when the overspend became clear. The Levy Control Framework was in place to cap the level that governments could apply to household energy bills every year in order to fund subsidy schemes for renewable power developments.

The 2020/1 cap was set at £7.1 billion, but officials had warned in 2015 that it was going to reach £9.1 billion as green energy projects took off. Ed Davey responded to the report, saying that it wasn't true that he had lacked the political will to act on the information provided, and he said that his leadership had allowed the department to achieve the cap level. 

He added that the consumer costs now projected had been calculated into the framework's 'headroom' - a comment which may do little to reassure worried domestic bill payers.