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Plans to tackle climate change will add
£277 to annual household fuel bills unless consumers give their
homes a ‘green makeover’, ministers warned yesterday.
Energy and Climate Change Minister Chris Huhne admitted the massive
expansion of wind farms across Britain – along with clean coal power
stations – will send electricity and gas prices soaring.
But Mr Huhne claimed that the price increases would be offset by
government plans to improve the energy efficiency of millions of
British homes.
According to the Department for Energy and Climate
Change, the shift to a green economy will increase the price of
electricity by 33 per cent, and the cost of gas by 18 per cent.
The average household gas bill is £620, while the average
electricity bill is £500.
Under the forecast price rises, those figures would rise to £732 and
£665 – an increase of £277.
And consumer groups warned that the proposed hike could hit families
and older people unable to add insulation, double glazing and new
boilers.
The prediction came as Mr Huhne unveiled the Government’s plans to
tackle the looming energy crisis and slash the UK’s greenhouse gas
emissions over the next ten years.
Britain has pledged to cut its emissions by 34 per cent on 1990
levels by 2020.
In the first annual energy statement to MPs, the Liberal Democrat
minister pledged to ‘keep the lights on’ with an expansion of wind
farms, renewable energy, smart meters and energy efficiency.
Mr Huhne – who previously opposed nuclear power – also said the
first of a new generation of nuclear power stations would be built
by 2018. Some of the price hikes will pay for 10,000 new wind
turbines on land and at sea.
He said: ‘The era of cheap, abundant energy is over. We must find
smart ways of making energy go further, and value it for the costly
resource it is, not take it for granted.’
Mr Huhne said the Government’s ‘green deal’ – in which millions of
homes will get
insulation, double-glazing, efficient boilers and draught excluders
– would reduce demand for energy.
Under the ‘green makeover’, domestic fuel bills will be 1 per cent
higher – increasing by just £13 a year – while business fuel bills
will go up 26 per cent as a result of climate change policies, he
said.
Mr Huhne said the cost of fossil fuels was also forecast to rise,
and that householders could be better off if the UK shifted to green
energy.
Audrey Gallacher, head of energy policy at Consumer Focus, warned
that many families could miss out on green makeovers for their
homes. ‘We remain sceptical that this is going to be delivered,
particularly for those on a low income,’ she said.
‘The Government is taking welcome steps to ensure the UK has a
secure, lower carbon, energy supply.
‘Measures to help customers, such as using smart meters to cut
energy use and energy efficiency schemes to stop homes leaking heat,
will benefit many.
‘However, there is no escaping the fact that steps to transform our
energy system have a huge price tag and that this is going to impact
hardest on the poorest consumers.’
Two years ago the Government’s Committee on Climate Change claimed
tough targets on tackling climate change will cost Britain the
equivalent of £500 for every household and push 1.7million people
into fuel poverty.
The independent Government advisers said the shift to a ‘low carbon
economy’ could cost 1 per cent of the UK’s gross domestic product –
or £14billion a year – by 2020
and lead to massive hikes in electricity and gas bills.
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