Powering Up Britain: Green initiative set to hike gas bills by £100 per year

The government aims to rebalance energy levies by encouraging the use of electricity instead of gas

The government has unveiled today a new ‘green’ initiative that could result in a rise of about £100 per year in gas bills.

This forms part of the government’s efforts to ‘rebalance’ energy levies, prompting individuals to use electricity rather than gas.

This approach, part of a broader Net Zero Growth plan, aims to speed up the transition to cleaner energy sources.

Currently, households bear the cost of transitioning to green energy through state levies on electricity, which makes it more expensive than gas.

These charges, along with subsidies for insulation and the vulnerable, amount to £131 on the average annual electricity bill.

Conversely, levies on a typical gas bill are just £34.

The government is worried that this disparity will deter people from replacing their gas boilers with alternatives such as electric heat pumps.

It is estimated that the proposed rebalancing could raise gas bills by up to £100 per year.

The proposal will be up for consultation and there is no set schedule for their implementation yet.

In the Powering Up Plan, the government states: “We want to make it easier for consumers to make the switch to green products by rebalancing prices between electricity and gas to remove these distortions.

“We accept the Skidmore Review recommendation that government should commit to outlining a clear approach to gas vs electricity ‘rebalancing’ by the end of 2023/24 and should make progress affecting relative prices by the end of 2024.

Rebalancing will generate the clear short-term price signal necessary to shift both households and businesses to lower-carbon, more energy efficient technologies like heat pumps.”

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