Ofgem secures £450k from GDF SUEZ/IPM for environmental obligation failure
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- GDF SUEZ/IPM met 38.6% of a reduced* energy saving obligation by required deadline
- Generator took prompt action to fully address the shortfall after the deadline by continuing to install energy efficiency measures to households in low income areas
Ofgem has today secured a £450k payment from the generator owner GDF SUEZ/IPM for failing to meet its targets under the Government’s Community Energy Savings Programme (CESP). GDF SUEZ/IPM is to make a payment to Age UK in order to support the charity’s community energy programmes.
Under CESP, generators as well as energy suppliers were obligated to deliver energy saving measures to households in low income areas by the end of December 2012. The scheme was designed to help lower carbon emissions and lower bills for households through the installation of energy efficiency measures. GDF SUEZ/IPM delivered 38.6% of its reduced* target on time. GDF SUEZ/ IPM’s failure to meet its reduced target meant around 1,000 households missed out on energy efficiency measures during a cold winter.
Ofgem found that the risk of non-delivery would have been reduced with a more proactive approach to project management and supervision by GDF SUEZ/IPM.
However, following the missed deadline, GDF SUEZ/IPM quickly installed energy efficiency measures to a volume slightly above its CESP shortfall, by March 2013. GDF SUEZ/IPM’s cooperation also enabled a quicker resolution to the investigation and without either of these factors the level of penalty would have been higher.
Sarah Harrison, senior partner in charge of enforcement said: “Failure to deliver obligations on time has a detrimental impact on consumers. GDF SUEZ/IPM’s late delivery meant low income households missed out on energy saving measures during the early months of 2013, where consumers experienced a particularly cold winter. Our fine today reflects these factors but also the prompt action taken by GDF SUEZ/IPM to make up its shortfall.”
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Notes to editors
* As was permitted under Article 21 of the CESP Order, GDF SUEZ/IPM traded away 562,295tCO2 of its total 852,080tCO2 obligation in 2010. It was left with an obligation of 289,785tCO2 to be delivered by December 2012 and GDF SUEZ/IPM delivered 38.6% of this reduced obligation. Therefore, the failure to meet the CESP target relates to this reduced obligation.
IPM is a 75:25 joint venture between International Power Ltd. and Mitsui & Co., Ltd. International Power Ltd. is wholly owned by GDF SUEZ.
1. Background
The CESP overall targets were set by the Department of Energy and Climate Change (DECC). Ofgem administered the two schemes while DECC was responsible for the policy. Ofgem’s role included calculating the individual targets of qualifying energy companies, reporting to the Secretary of State and initiating enforcement action where appropriate.
More information about CESP.
Ofgem issued a press release and open letter on the 21 September 2012 that warned energy companies that they risked enforcement action if they failed to meet their CESP targets. We encouraged energy companies to continue to install energy efficient measures after 31 December 2012. These mitigation actions were not a substitute for compliance but ensured the original benefits envisaged under the CESP were realised. Without this approach, thousands of households in low income areas would have lost out. These mitigation actions were taken into account as part of our investigation.
2. Investigations
In May 2013, Ofgem launched investigations into six energy companies who failed to deliver on time their obligations under the Government’s Community Energy Savings Programme (CESP) schemes. The obligation to meet the CESP target arose under Article 14(1) of the Electricity and Gas (Community Energy Saving Programme) Order 2009 (SI 2009/1905).
For further press information contact:
Lisa O’Brien: 0207 901 7426
Claudia Cimino: 0203 263 2722
Out of hours media contact number: 07766 511470