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One in Four Face Fuel Poverty Thanks To Green Taxes

By Katie Anderson on October 12, 2011

One in four UK households could well be forced into fuel poverty, thanks to the Government’s controversial green energy targets.

That’s the bleak warning City analysts have issued to ministers, if the Government continues to pursue its plans to encourage the uptake of renewable energy technologies, such as solar PV panels and wind turbines.

Thanks to low incomes and rising energy costs, fuel poverty seems to no longer be solely restricted to traditional lower-income families, with an increasing number of middle-income homes struggling to pay their gas and electricity bills. Add into the mix the Government’s somewhat controversial green energy targets, and more and more households risk being plunged into the fuel poverty trap.

According to Martin Brough, an energy industry analyst at Deutsche Bank, by 2015 around a quarter of UK households could be driven into fuel poverty. Energy providers have already increased their energy tariffs by an average of 20% in the last 12 months, which has seen average annual household bills hit £1,293. With bills predicted to increase by another 25%, that figure is set to climb to £1,618 by 2015. 

“Our analysis suggests rising energy bills and sluggish income growth will make household energy less affordable than at any time since the oil shocks of the 1970s,” said Mr Brough.

With Energy and Climate Change Secretary Chris Huhne fighting their corner , the Coalition Government is keen to drive its green energy agenda forward. Consequently the warning is unlikely to have any dramatic effect on green policies, which have more than their fair share of supporters who believe households will ultimately be better off thanks to the Government’s green energy drive.

One such supporter of a switch from fossil fuels is Dr Robert Gross, director of the Centre for Energy Policy and Technology at Imperial College, London.

“Cutting support for renewables would slow down the UK’s progress in reducing dependence on imported fossil fuels,” said Dr Gross.