CCC report shows that household energy bill increases caused primarily by rising cost of gas, not environmental policies – 15 Dec 2011

The Committee’s findings disprove often repeated claims that recent bill increases are due to environmental policy costs, and that major investments in low-carbon power capacity will drive dramatic bill increases over the next decade (e.g. as high as £3,000).

The Committee’s analysis focuses on the 84% of UK households (21 million) that have dual-fuel energy bills (i.e. use gas for heating rather than electricity or other fuels).

The Committee’s analysis focuses on the 84% of UK households (21 million) that have dual-fuel energy bills (i.e. use gas for heating rather than electricity or other fuels).

Looking forward, bills are projected to increase by around £110 over the next decade to support investment in low-carbon power capacity (£100) and energy efficiency in homes (£10). Further increases will be required to support grid investment (£15), and may be required depending on gas price movements.

However, there is scope for bill reduction relative to 2010, both because this was a cold year requiring high energy consumption for heating, and because much of the UK’s boiler stock will be replaced by modern and much more efficient boilers over the next decade.

Lord Adair Turner, Chair of the Committee on Climate Change said:

“We were keen to provide a dispassionate analysis of household bill impacts in what has become a politically controversial area. We found that bills have increased primarily in response to increased wholesale gas costs and not due to environmental policies. Over the next decade, we anticipate a rise of around £100 in the average bill as a result of investment in low-carbon power capacity, which will benefit the UK in the long run. And if we introduce new polices to stimulate energy efficiency improvement then bills in 2020 could broadly be contained at current levels.” 

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