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Exclusive: Fears mount Green Deal could strip funds from renewable schemes (Eco news)

Exclusive: Fears mount Green Deal could strip funds from renewable schemes
Business Green reported

The Office of National Statistics (ONS) is poised to make a crucial decision on the future of the government's flagship Green Deal energy efficiency scheme, which could have major implications for the UK's wider low-carbon energy policy.

Under the planned Green Deal scheme, which is due to come into effect from next autumn, energy firms have to pay into an Energy Company Obligation (ECO) that is designed to ensure households that are hard to treat or face fuel poverty receive additional funding to cover energy efficiency improvements.

As energy companies are likely to pass the cost of this ECO on to customers in the form of higher prices, the ONS is being asked to decide whether it qualifies as "non-discretionary spending" and should therefore be managed in the same way as the existing feed-in-tariff (FIT), renewables obligation (RO) and warm home discount (WH) schemes – all of which have to comply with a spending cap imposed by the Treasury.

Speaking to BusinessGreen, shadow climate change minister Luciana Berger warned the ONS decision could leave each of the government schemes short-changed.

"If the ONS deems it to be non-discretionary spending, then DECC [the Department of Energy and Climate Change] is going to have to convince the Treasury to raise the cap, or else find a way to divide the money between the ECO, FIT, WHD and the RO," she said. "It is a really important decision for the future of all these schemes.

"The government has guaranteed that the ECO will provide funding of £1-2bn every year to support the Green Deal. It must keep that promise or the Green Deal will do nothing to tackle fuel poverty and could fail before it evens gets off the ground."

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