Switch to low-carbon future would save households £1,600

A saving of £45bn should be good news,  but the study’s conclusions clash with the pursuit of gas

A A A

British households will save £45bn, or £1,600 apiece, if the government hitches its electricity supply to low-carbon sources such as wind and nuclear rather than gas, a parliamentary advisory committee has estimated.

Overturning the general consensus that green electricity is more expensive than gas-generated power, the committee finds that while “decarbonising” the energy supply will cost more in the next few years, the expense will quickly become negligible and will start paying handsome dividends after 2030.

This makes it essential for the government to stimulate tens of billions of pounds of investment in low-carbon energy by voting through a proposed amendment to the Energy Bill that would make the UK’s electricity supply almost entirely green by 2030, insists David Kennedy, of report author the Climate Change Committee (CCC).

Furthermore, even if hopes that Britain is sitting on vast amounts of accessible shale gas prove correct – which won’t be clear for at least a few years - the case for a low-carbon energy revolution in the UK is still “robust”, adds the CCC, an independent body set up to advise the government on climate change.

Tim Yeo, the Conservative MP behind the proposed amendment that will be put to the vote on June 4, said: “There has clearly been quite a big attempt to portray decarbonisation as a huge burden to the consumer. But this report provides a robust rebuttal to that argument on anything but a short-term basis.”

Mr Kennedy added: “If MPs are wondering whether to commit to low-carbon energy on the basis that it has significant costs and no benefits, the evidence here shows this is not the case. There is a clear benefit and limited costs.”

The report is so significant because it takes a much longer term view than previous studies and provides by far the most comprehensive analysis of the relative cost of gas and low-carbon energy sources.

It concedes that subsidies already in place to green Britain’s energy supply will add £100 to the average annual household energy bill between 2010 and 2020. Furthermore, the path to a predominantly green energy supply - in which 90 per cent of electricity is generated from low-carbon sources by 2030 - would add a further £20 by the end of the next decade.

But after that, the upfront costs of renewable energy plants such as wind and solar, will have been largely paid for, while developments in fledgling low-carbon technologies will dramatically reduce its cost – meaning that by 2050, consumers will be much better off than if the energy generators focussed that investment on gas power plants.

The report will exacerbate tensions between George Osborne’s gas-focussed Treasury and the Department of Energy and Climate Change, whose secretary Ed Davey is a key advocate of clean power. Mr Davey wants a decarbonisation target to be included in the Energy Bill and to apply from next year, while Mr Osborne is pushing to defer a decision on whether to introduce a decarbonisation target until 2016.

Mr Davey told The Independent: “In the long term, low-carbon could be  a much cheaper path to go. Our opponents don’t want to admit that we really do care about people’s bills, but actually I’m the consumer’s champion here.”

“The real reason for high energy bills is high global gas prices. I can’t control global gas prices but I can put a cushion between the high global gas price that people face and the bills consumers pay,” in part by supporting low-carbon power generation, he added.

The CCC and others argue that the uncertainty associated with delaying a vote until 2016 is putting off the potential investors Britain desperately needs to fund a much-needed overhaul of its energy system. Investors in everything from coal and gas-fired plants to wind turbines need to have a clear idea of their likely returns before agreeing to finance a project and cannot do this until they know how much of Britain’s energy will be required to come from low-carbon sources in the coming decades.

Britain is legally bound to generate 15 per cent of its energy – or about a third of its electricity – from renewable sources by 2020. But unless MPs vote through the 2030 decarbonisation amendment, there will be no low-carbon electricity target beyond 2020 – for at least the next few years. But the CCC report argues that it is crucial to invest heavily in low-carbon energy throughout the 2020s, warning that “the currently high degree of uncertainty about development of the power system beyond 2020 threatens to fundamentally undermine electricity market reforms”. 

The CCC’s £45bn estimate represents the value of savings in today’s money that British households would collectively make between 2020 and 2050. It is based on expected changes in the price of gas and the penalties big companies will face for their carbon emissions and could potentially rise as high £100bn – or more than £3,000 per household – if those figures have been substantially underestimated.

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Money
Welcome to tinsel town: retailers such as Selfridges will be Santa's little helpers this Christmas, working hard to persuade shoppers to stock up on gifts
news
News
i100
News
people
Arts and Entertainment
Architect Frank Gehry is regarded by many as the most important architect of the modern era
arts + entsGehry has declared that 98 per cent of modern architecture is "s**t"
Arts and Entertainment
Soul singer Sam Smith cleared up at the Mobo awards this week
arts + entsSam Smith’s Mobo triumph is just the latest example of a trend
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Maths Teacher

£110 - £200 per day: Randstad Education Leeds: Secondary Maths Teacher for spe...

Business Analyst - Surrey - Permanent - Up to £50k DOE

£40000 - £50000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

***ASP.NET Developer - Cheshire - £35k - Permanent***

£30000 - £35000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

***Solutions Architect*** - Brighton - £40k - Permanent

£35000 - £40000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker