Low-carbon strategy will raise household energy bills by £200 a year

Household energy bills will rise by more than £200 a year under the Government’s low-carbon strategy being announced next week.

Meeting Britain’s targets for cutting emissions could push another 1.7 million households into fuel poverty, meaning that seven million homes would be spending more than 10 per cent of their income on fuel.

The Renewable Energy Strategy, to be published on Wednesday, will state that more than £100 billion will have to be invested in renewable energy infrastructure, including 7,000 wind turbines, by 2020.

The Government has bound itself legally to cutting CO2 emissions by 34 per cent by 2020 and 80 per cent by 2050. To achieve this, it must increase the amount of energy generated from renewable sources from 2 per cent at present to 15 per cent by 2020.
The strategy estimates that energy bills will have to rise by about 20 per cent to pay for the investment. The average household currently pays about £1,150 a year for electricity and gas, a small decline on last year but still double the amount paid in 2003.

The cost of converting to renewable energy and modernising Britain’s power supply would add about £230 to annual bills. Costs are likely to ratchet up quickly as the investment is made, with the increase reaching 20 per cent within three years.
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