Energy suppliers told to improve advice to SMEs

The government wants energy suppliers to provide more energy services and efficiency advice to smaller firms. If they do not do so voluntarily, it will introduce mandatory measures.

The EU energy services Directive requires member states to remove obstacles to energy efficiency and create the conditions for energy service companies to deliver energy saving measures to customers. In August, the Environment Department (DEFRA) began consulting on how to implement the Directive, which must be transposed into UK law by 2008.1A gap analysis conducted for DEFRA concluded that the UK already meets many of the Directive’s requirements. It has a relatively liberalised energy market and measures like the energy efficiency and carbon reduction commitments ensure households and large energy users have access to energy efficiency advice and services. But the analysis identified three areas where action is needed:

  • The provision of energy services to small businesses and public sector organisations.
  • The provision of energy services, audits and advice to customers by suppliers of off-network products such as heating oil and gas canisters.
  • The provision of energy audits and energy efficiency measures by transport fuel suppliers.
  • DEFRA wants to ensure small businesses have access to the same level of energy services and efficiency measures from their suppliers as other sectors.

    But rather than expand the energy efficiency commitment (EEC) to this group or introduce an obligation on suppliers, the government wants to set up a voluntary agreement with suppliers to “ensure the availability and the promotion, but not necessarily the direct provision of an agreed range of energy services, energy audits and advice”. It warns it will regulate if such an agreement cannot be reached.

    Similarly, it also wants to reach a voluntary agreement with suppliers of non net-bound energy like fuels. These suppliers have largely been ignored because they account for only a small proportion of energy use. Again, if it cannot reach a voluntary agreement, the government will regulate.

    The government thinks transport fuels suppliers can do more to encourage customers to save energy. It favours a voluntary agreement to encourage them to act, but also floats two alternative approaches. The first would require suppliers to pay into a central, transport-specific fund to pay for energy audits and efficiency measures. The government would run the fund.

    The other option would be to place an obligation on suppliers to provide the services, but the government will only consider this if it cannot reach an agreement with suppliers.

    Other measures required to implement the Directive, including the introduction of improved billing and smart meters (see following  ), will be subject to separate consultations.