EDF has voiced its opposition to the government’s proposed “pounds for pylons” scheme which rewards customers living near new grid infrastructure by slashing their energy bills.
Instead EDF suggests that incentives should be focused on community projects.
Chancellor Jeremy Hunt announced initiative in November’s autumn statement. Under the proposal, households living within 200m of new transmission infrastructure would be offered discounts of up to £10,000 on their electricity bills over 10 years. In addition, communities located close to new transmission lines could be offered payments.
In its written response to the House of Commons energy security and net zero committee’s inquiry into domestic bills, EDF backs community benefits for those who live close to energy infrastructure, such as funding of local amenities, financial support for education and training as well as environmental improvements and conservation.
But EDF says that there should not be “greater use of discounts on energy”.
The emphasis of any renewable incentive scheme should instead be on early engagement with communities affected by energy infrastructure and ensuring a consistent approach to how community benefits are provided, the supplier’s response says: “The key principle is that the community itself should make the decision on the form of community benefit they will receive and that will be different depending on what they need locally.”
Meanwhile, Energy UK has told the committee that the proposed discount scheme should contain flexibility so that companies can tailor the mix of individual and community benefits to local wishes.
“Communities may wish to see outcomes different than direct benefits and these views should be taken into consideration,” says Energy UK, pointing out that many community benefit funds currently operated by suppliers opt to spend funds on supporting households suffering from fuel poverty and investing in energy efficiency.
It adds that mandating bill discounts in the scheme’s guidance could “hamper the flexibility required to cater and adapt to local circumstances”.
In its response, Centrica has urged the government to consider obliging recipients of its mooted bills discount scheme to have a smart meter installed if this has not already been done.
Centrica says that obliging recipients of the proposed discounts to have a smart meter installed will assist in completing the long-delayed rollout of the devices.
Smart devices may also be a practical requirement of the scheme itself because of technical limits to the amount of credit that can be added to traditional prepayment meters, the British Gas owner says.
It also says that if a discount scheme is to be introduced, payments should only be dished out once or twice a year, like the Warm Homes Discount (WHD).
Administering payments more regularly than this frequency is likely to be “unduly burdensome” for suppliers, leading to additional costs for consumers, Centrica warns.
The supplier also says the government should learn lessons from the rollout of last winter’s Energy Bills Discount Scheme about where customers lacked a direct relationship with suppliers, such as those living in multi-tenancy properties.
It adds that it will be important for the government to provide suppliers with data on precisely who would be eligible for payments.