Household energy bills in the UK could be £600 higher in the next few decades if there is continued reliance on gas over low-carbon technologies, it was claimed today.
In a new report the Committee on Climate Change looked at the impact of carbon budgets on energy bills and found household bills could rise by £100 in 2020 to support development of low-carbon technologies. However, the Committee said it is “economically sensible” to invest in low carbon technologies over the next two decades to insure against future price rise.
According to the report, the main cause of energy bill increases since 2004 has been due to a rise in the international price of gas and investment in electricity and gas networks – accounting for 62% and 16% respectively in the average household bill. However, low carbon policies and support for energy efficiency has had less than 10% of the increase in bills.
Lord Deben (pictured), Chairman of the CCC said: “Our analysis confirms the benefits of adopting a strategy which invests in low-carbon technologies. This provides a portfolio of energy sources as insurance against the risk of high gas prices. It lessens the impact on household bills in the long term and enhances the competitiveness of UK industry.”
The Committee suggests energy efficiency could help offset at least part of the impact on commercial, industrial and household bills, however, stronger policies will be required.
Environmental groups Friends of the Earth and Greenpeace both welcomed the report.
David Powell, Friends of the Earth’s Economics Campaigner said: “This report is spot on. Fuel bills will rocket unless we rapidly wean our electricity system off fossil fuels. Clean power and saving energy are an essential insurance policy against sky-high fuel bills and the costs of climate change – investing in them now will be far cheaper for us all in the long-run.
“The current Energy Bill is an acid test of the Coalition’s long-term vision – Ministers must say no to Osborne’s dash for gas and set a target for cleaning up our power sector to give renewable energy firms the confidence to invest in Britain.”
Doug Parr, Greenpeace Policy Director added George Osborne’s “gas gamble is risking people’s wallets as well as the planet”.