UK energy bills to rise by an additional £5.3bn to fund 2020 emissions targets

At a time when consumer energy prices are already rising, a new report from Ernst & Young - Costing the earth? - has estimated that the typical UK domestic energy bill will need to increase by an additional 20%, and probably more, to pay for the cost of meeting the EU's 2020 emissions targets. This will lead to a total annual cost of £5.3bn to UK consumers in 2020. The 20% rise is the minimum additional contribution each domestic household will have to make through their energy bill, to fund the £100bn plus capital investment required for the UK to meet emissions reduction and renewable energy targets for 2020. The rise (which does not factor in commodity prices and strips out inflation) equates to an increase of £213 per UK household on energy bills, leading to many more consumers being caught within the government's definition of fuel poverty.

He concludes, “There is no silver bullet to meeting the UK and EU imposed reductions in emissions by 2020. Successfully achieving those targets in the UK will require concerted action by energy suppliers working in partnership with government, little to no delays in the construction of low carbon generation such as new nuclear and renewables, clarity on policy mechanisms and better education for customers that they will have to pay for low carbon generation.”

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