British Gas faces fines over targets



British Gas could be fined millions of pounds by energy regulator Ofgem after failing to meet targets for improving household energy efficiency.

The power supplier, part of FTSE 100 (FTSE: ^FTSE - news) energy giant Centrica , is understood to have missed parts of its Government-set carbon emissions reduction target (CERT) ahead of a deadline of the end of December 2012.

The targets required all the Big Six suppliers to install measures such as insulation in customer homes. Industry sources say some of the other major suppliers are also likely to have missed some targets.

Ofgem can fine companies up to 10pc of their turnover for failing under CERT and another efficiency scheme, the community energy saving programme (CESP).

The penalties, thought more likely to be in the region of single-digit millions of pounds, are expected to be announced in the spring.

Suppliers have blamed problems with the schemes, which British Gas claimed set "unrealistic" demands.

Companies had to install a certain proportion of the energy-saving measures in the homes of particularly poor or vulnerable customers. Suppliers say it has been too difficult to identify them and persuade them to take up the measures, paid for by all consumers on their bills.

Such problems have stoked the row over the planned successor scheme, the Energy Company Obligation, which suppliers argue is likely to cost £3.1bn far more than the £1.3bn the Government has claimed.

On this estimate the ECO, which requires suppliers to install efficiency measures for poor customers and certain expensive kinds of insulation, could cost households £125 a year more than double the costs of current schemes.

The new scheme will launch on January 28 but was said to be "in tatters" in the autumn after no households registered an interest.

British Gas said, however, it was confident it will have met its targeted carbon savings across all its environmental obligations, after taking into account the latest guidance published by Ofgem.