Green fuel bills ‘an insurance against gas’

The latest analysis by the Committee on Climate Change (CCC)confirms that consumers are set to see bills increase by £100 by 2020 to support green energy such as offshore wind power.

But the committee described the investment in low carbon power as “insurance” against the risks of high costs of gas in the future.

The average household electricity bill could rise by £600 by 2050 if the UK relies on “unabated” gas power that has no technology to cut its emissions, as a result of rising gas prices and the cost of paying for carbon pollution.

Bills would only be £200 higher than today by mid-century if the country pushes ahead with a low carbon system, and consumers would be much less exposed to price shocks, the research showed.

Lord Deben, chairman of 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 risks of high gas prices.

“It lessens the impact on household bills in the long-term and enhances the competitiveness of UK industry.”

CCC’s chief executive David Kennedy said of the increases in bills to pay for renewables and other low carbon technologies: “It’s a cost, but it’s insurance. Sensible people take out insurance when faced with risk. We’re exposed to potentially very high electricity prices and bills across all our sectors.”

The average consumer dual fuel bill has risen £360 between 2004 and 2011, the committee report found. The majority of the rise was down to rising wholesale gas and supplier costs, with just £30 the result of low carbon electricity and £40 down to energy efficiency policies.