Can the energy bill rise be stopped with green policies?

The Momentum UK Team 28 March 2013

Climate policies have the power to play a large role in the effort to reduce the average home energy bill as well as national dependence on foreign sources of energy the Energy and Climate Secretary Ed Davey has said.

Commenting on recent analysis from the Department of Energy and Climate Change (DECC), the secretary said that the average annual household energy bill, which currently sits at £1,250, can be reduced by climate change policies by £166 by 2020.

The report from the DECC showed that 85% of the average £1,250 is completely out of the hands of the UK government and is instead determined by international gas and electricity prices, as well as transmission and metering costs. Once energy companies have taken their profits and VAT has been paid current government policies can only control about 11% of the bill.

Critics however have claimed that some of the government's climate policies, such as encouraging use of wind turbines could cost the UK tax payer more than £120 billion in the next eight years. Despite this the Energy and Climate secretary insists that better gas boilers, tighter building regulations, the green deal loan scheme and smart meters could save UK householders about £166 per year by the turn of 2020.

Davey said that onshore and offshore wind power is vital in order to insulate the UK from global energy price fluctuation and with an annual average cost of £18 per house, "It is a tiny part of the overall bill." He added:

"Global gas price hikes are squeezing households. They are beyond any government's control. The analysis shows that our strategy of shifting to alternatives like renewables and of being smarter with how we use energy is helping those who need it most to save money on their bills,"

Greenpeace Policy Director, Doug Parr, said:

"This report demonstrates that green policies are not causing rocketing household bills and they will not do so in future. With the right investment, UK clean energy will only get cheaper. The same cannot be said of gas."