Renewable Energy Policies 'Not Responsible for Bigger Bills'

Renewable energy policies are not to blame for soaring energy costs, the independent Committee on Climate Change (CCC) said last week. Instead, the ongoing increase in wholesale and retail gas prices are behind bigger bills, it argued, defending policies aimed at encouraging the use of renewable energy sources and energy-efficient forms of heating such as solar power and underfloor heating.

The CCC published research which showed that most UK homes had seen annual energy bills increase from ?604 in 2004 to a whopping ?1,060 in 2010. A massive two thirds of this increase was due to rising wholesale gas prices going up, whereas subsidies to renewable energy producers had only been responsible for 7 per cent of this overall increase.

When the £455 bills increase is broken down, researchers said that £290 was due to rising gas prices, £70 was due to increased distribution costs, £20 was VAT and just £75 was thanks to renewable energy policies aimed at reducing carbon emissions and protecting the environment. When this £70 was broken down, £30 of the increase was due to increased investment in renewable energy and £45 was for schemes promoting or subsidising reducing energy consumption, such as the fitting of insulation, replacement of hot water boilers or the building of new homes featuring low energy heating sources such as underfloor heating. Businesses associated with energy-efficiency or renewable energy welcomed the report, expressing relief that it countered perceived attempts by the UK government to blame soaring energy bills on pro-environmental policies, during his recent Autumn Statement, for instance, Chancellor George Osborne complained about the “burden” of environmental legislation.

The CCC went on to suggest that if energy-efficiency measures continue to be implemented throughout the UK, by 2020 average bills could be reduced in real terms to around £1,085, which is only just more than current levels. It suggested such measures as energy-efficient light bulbs and appliances, plus loft and cavity wall insulation ? together these measures alone could cut energy consumption by 25 per cent over the next ten years.

WWF-UK head of energy policy Nick Molho welcomed the report, saying that the CCC had “injected a note of sanity into the fevered debate around household energy bills.” Mr Molho condemned the “myth” that renewable energy and energy-efficient policies had increased the cost of heating and lighting Britain’s homes, saying: “This deliberate attempt to pervert the debate and mislead consumers has also damaged confidence in an industry that can provide a major boost to UK investment and economic growth.? “The reality is that renewables offer us the best chance to diversify our energy sources away from our excessive over-reliance on gas and to create a substantial renewable energy industry here in the UK,” he insisted.