Energy chief denies green reforms ‘unworkable’

Mr Davey was responding to fears that consumers will face bigger fuel bills because of policy differences at the heart of Government.

The Commons Energy and Climate Change Select Committee was particularly critical of the Government’s attempts to encourage nuclear investment through long-term price agreements, but without a subsidy.

Mr Davey refuted the suggestion and renewed his support for the “Green Deal” which will be launched this autumn. He said: “I do not believe for a minute that fuel bills are going to soar.

“Our analysis shows that the average fuel bill will be 7 per cent lower by 2020. Our policies are absolutely desirable to keep costs down.”

He added: “I have spoken to many energy companies, investors and academics who very much support the proposals in the bill. There are a number of issues which people have been raising. The whole drive of the bill is partly to decarbonise and clean up our emissions, and to do that in the most cost-effective way. This is part of our way of helping the country move towards a low-carbon situation and make it (fuel) more affordable.

“Affordability of bills is critical to (the Department of Energy and Climate Change). Everything we are doing has affordability at its heart.

“There is always going to be some pressure on bills through global markets, but what we’re trying to do is offset those pressures. That is exactly what the Green Deal is about.”

Earlier today, Mr Davey was boosted by the news that Chancellor George Osborne appeared to back down and drop his calls for deeper cuts in subsidies for onshore wind farms if his Liberal Democrat coalition partners compromise on green energy targets.

The Chancellor had urged the Lib Dem Energy Secretary to retain a big role for natural gas rather than commit to the virtual decarbonisation of the electricity market by 2030.

In return, he is prepared to accept Mr Davey’s proposed cut in onshore wind subsidies of just 10 per cent. The Treasury has been pressing for tougher cuts in the subsidies, of up to 25 per cent according to reports.