Green measures will not lead to 'astronomical' energy bills: analysis

Household energy bills will rise by £190 by 2020, but charges for renewables and energy efficiency measures will contribute just £110 of the increase, UK government climate advisers calculate

Household energy bills will rise by £190 by the end of the decade, according to an analysis published on Thursday by the government's official climate change advisers. But fears of "astronomical" rises as a result of building a clean energy system for the UK have been rejected by the report, which says charges on future bills for renewable energy and energy efficiency will contribute just £110 of the increase.

The Committee on Climate Change (CCC) calculates that the total rise could be just £25 if the full energy savings can be delivered by insulating lofts and cavity walls and replacing inefficient refrigerators and washing machines.

Some reports have suggested bills will rises up to £3,000 by 2020, up from £1,060 in 2010, the typical bill for homes that use electricity, and gas for heating.

"There have been claims that there will be astronomical bill rises in the next decade due to low-carbon policies. Our analysis disproves this," said David Kennedy, chief executive of the CCC. "We want to demystify this issue and have an honest debate based on facts not assertions."

Previous bills for gas and electricity rose by £455 between 2004 and 2010, the CCC found, and 84% of this rise was due to the soaring cost of gas on international markets. Green measures have added £75.

Investing in low-carbon energy was the "sensible economic path" said Kennedy. "It will be very expensive to solve the problem [of cutting carbon emissions] later. We could ignore the issue and build gas plants, but then we will end up with lots of power stations we will have to scrap."

"There has been a concerted effort by some campaign groups to completely mislead the public into believing that green taxes have been the main cause of rises in fuel bills," said Bob Ward, at the Grantham Research Institute on Climate Change and the Environment at London School of Economics. "These groups, including the Global Warming Policy Foundation and the Taxpayers' Alliance, appear driven by an extreme ideological opposition to environmental regulation, and have sought to confuse and misinform the public with blatantly inflated figures."

The CCC's analysis was conducted independently of the government, but reached a similar conclusion. A spokesman for the Department of Energy and Climate Change said: "The CCC is correct in their analysis that past bill increases are primarily due to increased wholesale gas costs. This underlines why it is so important that we reduce our reliance on imported fossil fuels and protect our homes and businesses from international fossil fuel price shocks."

The CCC said the uncertainties in £110 expected to be added to bills for low-carbon measures were small, but that uncertainties on whether energy efficiency could be delivered were much greater. "The challenge for the government is to put measures in place to encourage people to improve their energy efficiency," said Kennedy.

The CCC says energy use could be cut by 6% by 2020 by properly lagging the millions of lofts in the UK which have no or inadequate insulation, and filling the millions of empty cavity walls. But its report argues there is a much greater opportunity from the replacement of old and inefficient refrigerators and washing machines. If these white goods are replaced at the end of their useful lives with efficient devices, energy use could be cut by 19%. "They are not much more expensive and you will save a lot of energy and money," said Kennedy.

Kennedy said one of the errors made by other analyses was to suggest that 30GW of wind turbines would be built by 2020 – the equivalent of around 30 nuclear power stations. The official objective of the government and the recommendation of the CCC is 12GW.

"This report shows that wild speculation on bill increases has been nothing but scaremongering," said Doug Parr from Greenpeace.

Nick Molho, at WWF-UK said: "It's great the CCC has injected a note of sanity into the fevered debate around household energy bills and confirmed what everyone knew – the cost of fossil fuels are forcing up energy bills."

He added: "It is the UK power sector's heavy reliance on gas and other fossil fuels – not renewable energy – which has overwhelmingly driven recent price hikes. The reality is that renewables offer us the best chance to diversify our energy sources away from our excessive over-reliance on gas and to create a substantial renewable energy industry here in the UK."

Separately, a new YouGov poll published on Wednesday revealed that 60% of the public think the "government is right to subsidise windfarms to encourage more use of wind power". Three-quarters of the public said the government should be looking to use more solar power, although ministers have recently slashed solar subsidies.


Damian Carrington

The GuardianTramp

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