Govt Policies Could Lead To 30% Rise In Energy Bills
The Prime Minister has been warned that Government policies such as carbon pricing will lead to a 30% increase in energy bills by 2020.
Energy bills could increase by £300 as a result of the Government’s own green policies and it’s been argued by the senior policy advisor to the Prime Minister that claims by the Department of Energy & Climate Change that price increases of 30% by 2020 would be offset by lower consumption were less than convincing.
Policies such as carbon pricing are designed to encourage the use of sources of renewable energy and nuclear power. In addition, the DECC has suggested that the effect of green policies on electricity bills “would be lower due to the effect of other policies, notably energy efficiency measures, in lowering electricity consumption”.
However, senior policy advisor, Ben Moxham said “we find the scale of household energy consumption savings calculated by DECC to be unconvincing”.
Mr Moxham said DECC calculations may be based on a belief that energy efficiency measures won’t need to be subsidised because consumers will implement them anyway. However, he said “we believe a large number of measures will need to be subsidised, given the hassle factor and other barriers to consumer uptake”.
The news could prove to be problematic for Mr Cameron because at the time of the general election he promised to deal with rises in energy bills and one of the ways he suggested doing this was to give regulators more powers to control increases in both domestic and business electricity prices.
Meanwhile the Energy Secretary, Chris Huhne, has rejected claims that energy bills will increase by hundreds of pounds as “absolute nonsense”. In fact, a spokesman for the DECC said “Reforms will not add £300 to bills. Our policies will both add and subtract from future bills because we need to build new reliable energy sources to keep the lights on, but we’ll also be helping people to cut their bills through greater energy efficiency”.
The spokesman added “Our reforms to the electricity market will deliver the best deal for Britain and for consumers: getting us off the hook of relying on imported oil and gas by creating a greener, cleaner and ultimately cheaper mix of electricity sources right here in the UK”.
Mr Huhne has argued that if there were no energy market reforms then bills would still go up and could mean the UK ends up with the highest energy bills in Europe.