Government policies ‘not to blame for recent price hikes’

The UK Energy Research Centre says policy costs in the UK are actually not very expensive

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The UK’s policy costs are lower than those in many other nations, including Germany, France, Sweden and Australia.

That’s the suggestion made by an in-depth analysis of domestic power prices conducted by the UK Energy Research Centre (UKERC), which suggests government policies are not to blame for recent electricity price hikes.

Policy costs are levied onto consumer bills to help pay for schemes such as the Capacity Market, Contracts for Difference, Feed-in Tariffs, the Energy Company Obligation and the Warm Home Discount.

The research illustrates that despite claims from some energy companies that higher wholesale prices and energy policy costs are pushing up bills, there is no evidence that policy costs are the primary driver of price hikes.

It shows although policy costs have increased in recent years, domestic electricity bills have not increased at the same rate due to improved efficiency, making support for low carbon generation in the UK “good value for money” compared to many other countries.

Dr Rob Gross, UKERC Co-Director and Report Author, said: “Markedly differing contexts between countries and even within countries, means that caution should be exercised when comparing prices. But it is a total myth that UK consumers pay more for green policies than consumers in other countries.”

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