The Energy Redress Scheme: The Past Four Years

In April 2018, Energy Saving Trust was appointed by Ofgem to deliver the Energy Industry Voluntary Redress Scheme which distributes voluntary payments made by energy companies that may have breached regulations.

The scheme’s aim is to support the most vulnerable energy consumers in Great Britain through the development of innovative energy efficient and carbon reduction products or services and to empower consumers to reduce their carbon emissions.  

Let’s have a deeper look into how it works and how it’s progressed during the past four years.

 

How it works

Some of Ofgem’s robust enforcement and compliance activity results in voluntary payments from companies that may have breached Ofgem administered rules. The Energy Redress Scheme distributes these funds to projects across Great Britain, enabling organisations to support customers who need help with their energy bills and helping to reduce carbon emissions.

 

Russell Ogilvie, Head of Enforcement at Ofgem said:

“Protecting current and future energy consumers is our key priority here at Ofgem, and since we introduced the Voluntary Redress Fund, our compliance and enforcement activity has resulted in £67 million being granted to charities working with consumers. We work closely with Energy Saving Trust to ensure funds are allocated where they are needed most, based on strict criteria; whether that’s helping vulnerable consumers, sector innovation, or making homes more energy efficient. This is all part of our wider work to make sure consumers are protected during these difficult times.”

 

Key goals

The Energy Redress Scheme primarily supports energy consumers in vulnerable situations. It also funds projects that develop or trial innovative services that will help energy consumers, or activities aimed at reducing carbon emissions from energy use. The funding is made available to charities, and more recently to community energy groups in England, Scotland and Wales to deliver projects and services that meet these priorities.

This has become especially important in the past year. As the cost-of-living has gone up dramatically, more people are struggling to heat and power their homes. A key priority of the Energy Redress Scheme is getting funding to organisations who are best placed to support the most vulnerable people in their community.

Graham Ayling, Senior Project Manager for the Energy Redress Scheme said:

“The voluntary sector has a crucial role to play in supporting those most at risk from high energy prices and cold homes. It can also help to engage people in a just transition to a net zero carbon energy system. The Energy Redress Scheme provides an open route to channel funds to this vital work.

“Through the covid-19 pandemic and cost of living crisis, the charities and community groups the scheme has funded have worked tirelessly to help people reduce their energy use, and look forward to a cleaner, fairer future energy system.”

 

Phase one

In the four years since the start of phase one of the scheme in 2018, more than 1,000 charities and Community Interest Companies have successfully registered with the scheme and many of those have submitted project proposals. While not all projects submitted met the criteria for funding, each application receives feedback to review and are given the opportunity to reapply in a future round.

In total the Energy Redress Scheme has funded 439 projects across England, Scotland and Wales and awarded more than £67 million in funding. The projects have included:

• impartial energy advice services supporting vulnerable people
• digital media to engage hard-to-reach audiences
• research projects aimed at supporting elderly people and people living with disabilities
• partnership projects, promoting energy efficiency across vulnerable communities
• crisis payment funding
• carbon emission reduction projects designed to create measurable and lasting reductions in emissions.

 

Example project

Research Institute for Disabled Consumers, RiDC, in partnership with Energy Systems Catapult, was recently awarded almost £250,000 for the Enabling Inclusive Innovation and Sustainable Choice project through Ofgem’s Energy Redress Scheme.

The two-year research project to discover how disabled consumers can have greater access to sustainable energy involves RiDC's 3500+ consumer panel and an additional test resource of 50 new homes for Energy Catapult’s Living Lab. This will help together develop innovative and accessible smart, low carbon energy products and services. The research will inform consumer and policymaker decision making.

Caroline Jacobs, Head of Development at RiDC commented:

“The energy transition to zero carbon must be inclusive and equitable, and that is unfortunately not what we have seen in much of our accessibility research into energy services and products so far."

With funding from the Energy Redress Scheme, our aim is to fill knowledge gaps on the barriers disabled and older people experience and identify emerging vulnerabilities. This project will play a big part in also enabling disabled households to use and test home energy products and services in their own home on a much more long-term basis.”

 

Map of projects funded

A full list of the funded projects can be viewed here.

 

Phase two

Following a renewal of our contract by Ofgem, phase two of the scheme opened in May 2022 with one funding round now complete (supporting 35 projects) and a second currently being assessed.

Phase two of the scheme has opened the funding to community energy groups, including community interest groups, co-operative societies and other community benefit societies, as well as the registered charities who could previously apply to the scheme.

This means that many more vulnerable households will benefit from projects that help them save money. Better tariffs, access grant schemes for home insulation and heating all provide small energy saving interventions as well as support customers experiencing problems with their energy supplier.

Phase two of the scheme also has a focus on community carbon reduction initiatives, alongside its core priority of supporting energy consumers in vulnerable situations, allowing communities to better tackle climate change on a local level.

 

Looking forward

Eligible organisations and projects that have registered interest in the scheme will be notified when new funds become available.

Further information on the scheme and the application process can be found on the Energy Redress Scheme website.