Energy bills could rise 50% on back of climate change policies

Energy bills could rise 50% on back of climate change policies

12 July 2010 / by Rachael Stiles

Investment in energy infrastructure and measures to reduce greenhouse gases could cause energy bills to rise by 50 per cent.

According to the Government's Fuel Poverty Advisory Group, while it recognises that initiatives to reduce climate change and develop greener energy are "essential", consumers will end up paying the price.

The fuel poor are being hit the hardest by the cost of climate change policies but are seeing little benefit from them, the Advisory Group has said in its eight annual report.

The last six years has seen energy bills rise 125 per cent, and fuel poverty has consequently ballooned by nearly 400 per cent, with 4.6million households now deemed to be fuel poor, where more than 10 per cent of their income is spent on domestic energy.

The current climate change policy is "regressive", the report says, "and has a disproportionate impact on those on low incomes", so it is calling for a "sea change" in Government policies, including a clear obligation on gas and electricity providers' energy efficiency programmes.

Those classified as being fuel poor should be prioritised for the current Warm Front scheme, the future of which is in question, until a better scheme is developed.

To ensure that the fuel poor benefit from the costs of environmental policies which are added onto consumers bills, the Group is calling for the funds raised from emissions trading or carbon pricing schemes, to be directed towards tackling fuel poverty.

The report is also critical of the Government's Green Deal, a plan to pay for energy efficiency measures on homes through bill savings; while it might work many consumers, it is unsuitable for the majority of fuel poor households. it says.

The Group argues that those who are fuel poor are already under-heating their homes in a bid to reduce their energy bills, so they would therefore be unlikely to be in a position to further reduce their energy use and make the savings required to pay for the measures.

Commenting on the report's findings, Derek Lickorish, chairman of the Fuel Poverty Advisory Group, said that the fuel poor should not suffer as a result of making energy greener: "Unaffordable energy bills already cause misery for millions and without urgent action the situation is going to get much worse."

"Energy prices are set to rise, so the Government needs a clear strategy on how it is going to end fuel poverty. The only solution is to make fuel poor homes more energy efficient."

The Group is calling on the Government to create a clear strategy on how it will end fuel poverty by 2016, to take action to reduce the impact of rising energy prices on fuel poor consumers, and improved targeting and investment in making the fuel poor's homes more energy efficient.

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