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Fuel Bills Could Rise By £300 With Green Energy Policies

By Katie Anderson on September 5, 2011

If Downing Street calculations are to be believed, household fuel bills could face an extra £300 increase, thanks to the UK Government’s green energy policies.

While energy secretary Chris Huhne and the Department of Energy and Climate Change (DECC) continue to deny any such claims, branding them as “absolute nonsense”, Downing Street advisers have issued this stark warning, saying average household bills will be subject to increases to the tune of hundreds of pounds.

The coalition’s policies, on issues such as carbon pricing, are being blamed for the projected rising in energy bills. According to the Daily Telegraph, the Prime Minister has been warned that a 30% rise in consumer energy bills by 2020 is very likely as a direct result of renewable energy policies.

Not only that, there is  some doubt that the price increases will be offset by lower consumption as a result of  implementing energy efficiency measures. Ben Moxham, David Cameron’s senior policy adviser on energy and environment claims the scenario  is “unconvincing”.

“DECC’s mid-case gas price scenario sees policies adding 30% to consumer energy bills by 2020 compared to a world without policies,” said Mr Moxham.

Mr Moxham added that “we find the scale of household energy consumption savings calculated by DECC to be unconvincing.”

As a means of boosting low carbon energy investment and allow the UK to meet its target of cutting emissions by 34% by 2020, the energy secretary has been pushing through energy reforms. Back in July, Chris Huhne launched the white paper on electricity market reforms, including policies to promote the use of low-carbon renewables and nuclear power, in addition to energy firms helping low-income households to become more energy efficient.

According to Mr Huhne and DECC, reports suggesting reforms will lead to some of the highest energy bills in Europe are “absolute nonsense” and without these reforms, energy bills will still rise.

A spokesman for DECC said “reforms will not add £300 to bills” and “reforms to the electricity market will deliver the best deal for Britain and for consumers: getting us off the hook of relying on imported oil and gas by creating a greener, cleaner and ultimately cheaper mix of electricity sources right here in the UK.”