The majority (83%) of the increase in energy bills is from wholesale and supplier costs, with less than a fifth (19%) due to low-carbon policies.
A new report (pdf) today from the Committee on Climate Change on energy prices and bills of the impacts of meeting carbon budgets reveals the majority (83%) of the increase in energy bills is from wholesale and supplier costs, with less than a fifth (19%) due to low-carbon policies, including 11% from energy efficiency measures “without which bills could have increased further over this period”.
See Fig. 2.3:
The overall picture is therefore similar to last year (Figure 2.3). Annual energy bills increased from £610 per household in 2004 to £970 in 2011.
Of this £360 increase (60%, compared to general inflation of 22% over the same period), the majority is unrelated to low-carbon policy:
• Around £290 was due to a combination of wholesale and supplier costs (£300), increasing transmission and distribution costs (£80), the Warm Home Discount (£10) and VAT (£20), offset by reduced energy consumption (-£120);
• Around £70 was due to low-carbon policy costs. Within this it is important to distinguish between the £30 cost increase towards decarbonising the energy mix through support for investments in low-carbon power generation including renewables, and the £40 cost increase for funding of energy efficiency measures, without which bills could have increased further over this period.
Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.
• Graph: UK energy consumption by sector – November 29th, 2012
Leave a Reply