Power Firms To Pay £39m For Target Failures

The energy regulator says it has secured £39m in fines and redress from two power generators for failing to meet environmental obligations.

Ofgem said Drax Power would pay £28m for failing to meet environmental targets under the government's Community Energy Saving Programme (CESP) while InterGen would lose £11m.

Its investigation - into six firms - found that Drax delivered just 37.1% of its CESP obligations while InterGen acheived just 6.4% of its targets.

The scheme was designed to lower carbon emissions through the delivery of energy saving measures, such as loft and cavity wall insulation free of charge, to households in low income areas.

The Government required generators as well as energy suppliers to deliver against individually set targets by the end of December 2012.

Ofgem said North Yorkshire-based Drax's failures meant several thousand households in some of the most deprived areas missed out on energy saving measures which would have helped lower their bills.

Its investigation found that senior management were "aware of the serious risk of non-compliance with CESP 18 months before the end of the scheme."

Ofgem said it had taken into account Drax’s inexperience in delivering energy efficiency measures to consumers and its lack of a customer base but decided the company could have taken more timely action to reduce the risk of not delivering its obligation.

The statement added: "In addition, after the deadline passed, Drax made no attempt to mitigate the carbon saving shortfall. This was a significant factor in Ofgem’s decision."

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