Government Disputes Energy Firm's Price Increase Claims

16 July 2013

The Government has rebutted claims from a major UK energy supplier that green policies will lead to increased energy bills, claiming that global gas prices are actually to blame.

The Department of Energy and Climate Change (DECC) was quick to point out that its Green Deal and Energy Company Obligation (ECO) initiatives, which provide funding for energy saving measures like Cavity Wall Insulation, Solid Wall Insulation and Loft Insulation, will save UK residents money in the long term.

The statement comes in response to claims from energy firm RWE NPower that in the average annual energy bill in 2020 is likely to be £240 higher than the Government's current projections.

According to the firm, the average combined energy bill will rise to £1,487 in 2020, an increase of £240 on the current level of £1,247. Previous Government estimations have stated the increase will be just £140.

The new chief executive of NPower, Paul Massara, said: “Energy costs are rising. This is an indisputable fact, and it's time that all of us involved in energy in the UK are upfront about it.

[The] main factor behind rising costs is government policy and regulation to fund this country's transition to a more efficient economy, with modern infrastructure and warm, insulated homes for all.

We are very clear that we do not want to be critical of government - rather, we want to ensure customers have the facts, so that they understand that for this cost, they will get a low-carbon economy, security of supply and warm, insulated homes.

Government and energy suppliers need to be much clearer about the facts behind rising energy costs, so we can present one clear message to consumers: energy costs will rise, and the only way to control of this is taking action to reduce consumption.”

Greg Barker, Minister for Energy and Climate Change, said: “It is right that we have a grown-up discussion about the impact of energy investment. However, global gas prices, not green policies, have been primarily pushing up energy bills.”

That is why it is vital we crack on with securing investment in a diverse energy mix that includes renewables and new nuclear, as well as gas.

We must also continue to drive up the energy efficiency of the nation's housing stock, particularly the homes of the most vulnerable households.”

The Green Deal and ECO have been devised to do exactly that. Under the Green Deal, householders can install measures including Cavity Wall Insulation, Solid Wall Insulation and Loft Insulation. Improving the insulation of a property will see the cost of bills fall.

ECO also provides the installation of Cavity Wall Insulation, Solid Wall Insulation, and Loft Insulation, amongst others, but focuses on vulnerable households with the majority of funding in non-repayable grant form.

Barker continued: “In 2020, bills will be £166 lower than they would be if we left ourselves exposed to global price shocks, left our homes leaking energy, and left future generations to deal with climate change.”

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