Government’s green energy initiatives: Could they push up the cost of our energy bills?
The government is making an increasing drive towards the use of renewable energy resources in order to realise its aim of achieving a ‘massive decarbonisation of the power sector by 2030’.
This will include initiatives such as the building of new, cleaner power plants and the increasing adoption of a range of energy sources including low-carbon renewables, new nuclear, CCS (Carbon Capture and Storage)and gas.
However, while these green initiatives are also intended to make consumers savings on their energy bills in the long-term, some have argued that consumers will be adversely affected by the changes – putting a larger, not smaller, dent in household budgets.
Here are some of the latest estimates on the impact of green energy policies on domestic energy bills:
Green energy 'folly' will hit households hard by 2020
A recent report by the Renewable Energy Foundation has argued that families will face having an extra £600 added to their energy bills by 2020, as they shoulder some of the cost of green energy subsidies – a collective cost to consumers of a staggering £16 billion a year in just seven years time, according to their estimates.
Commenting on the report’s findings, Dr John Constable, director of the Renewable Energy Foundation, paints a grim picture for consumers’ future energy costs:
“Shifting to current renewables for the bulk of our energy would result in a reversal of the long-run economic trend since the Industrial Revolution.
“More people would be working for lower wages in the energy sector, energy costs would rise, the economy would stagnate and there would also be a significant decline in people’s standard of living.”
Green taxes will rise but consumers will make overall savings
Despite the fact that the amount which consumers pay towards green taxes is set to rise from a current figure of £112 (from an average annual energy bill of £1,267) to £286 per family by 2020, the Department for Energy and Climate Change (DECC) argues that consumers will still be better off as a result of green initiatives.
They argue that the adoption of smart meters, energy savings improvements, modern condensing boilers and more will mean that consumers actually save £452 a year by 2020.
Whatever the final outcome, you can always secure the best deal on your domestic heating oil prices by asking your supplier about their latest offers.