Energy bills to rise by £170 a year to fund wind farms

 

The cost of Government support for low-carbon electricity under the new Energy Bill will add less than £100 to the average household's bills annually, Energy Secretary Ed Davey said today.

Critics claim that the legislation will send consumers' bills soaring, by authorising ministers to put £7.6 billion towards "green" power generation in 2020, up from £2.35 billion this year.

But environmentalists say the Bill does not go far enough, because it does not include a target to slash carbon emissions from the power sector by 2030 - although it does include the power to set a target in 2016 if it is considered necessary.

An estimated £110 billion is needed in the next decade to renew the UK's ageing electricity infrastructure, with much set to go into low-carbon power sources such as wind farms to cut emissions and keep the lights on.

The forthcoming Energy Bill, which aims to drive the investment, has been the subject of political wrangling within the coalition, with Mr Davey voicing support for long-term limits on carbon emissions by the power sector and Chancellor George Osborne backing a second "dash for gas" with support for new gas power plants as a cheap source of electricity and tax relief for unconventional shale gas exploration in the UK.

But agreement has now been reached on a series of contentious issues.

In a statement last night, Mr Davey hailed a "durable agreement" which would allow him to introduce a Bill next week and have essential electricity market reforms up and running by 2014, as planned.

"They will allow us to meet our legally-binding carbon reduction and renewable energy obligations and will bring on the investment required to keep the lights on and bills affordable for consumers," he said.

The Energy Secretary rejected accounts of a bitter row with the Chancellor, describing the long-running talks as a "good negotiation" leading to the two coalition parties "coming together (to) deliver the biggest boost to green energy".

He made clear that the legislation will not rule out future abated gas plants or the exploitation of shale gas reserves through innovative "fracking" technologies in areas such as Lancashire.

Mr Davey, who said he would make a decision "shortly" on whether to allow power company Quadrilla to continue fracking near Blackpool, told BBC Radio 4's Today programme: "I don't think it's gas or renewables. I think we need both, and actually they can be very complementary... I have been very clear and the Chancellor has been very clear that shale gas does offer an opportunity to the UK."

Dismissing predictions of massive increases in electricity bills as "utter rubbish", the Energy Secretary said: "The impact from supporting green policy is only 2% on people's bills at the moment. That will grow and by 2020 it will be about 7%. We are talking about under £100 in 2020."

The impact of other Government measures, such as initiatives to encourage energy efficiency, will result in a £94 overall saving on household power bills by 2020, he said.

Labour has condemned the Bill's failure to set a limit for the amount of carbon dioxide that can be emitted per megawatt hour of power from the electricity sector by 2030 - something which the party's leader Ed Miliband backed in a speech yesterday and which supporters say is necessary to give investors certainty to back renewables, carbon capture and storage technology, and nuclear reactors in the UK.

Although there is no 2030 target, the inclusion of a power to establish one in 2016, when the Government's advisers on climate change are set to recommend how much carbon emissions should be cut by 2030 across the economy, is being claimed as a victory for Mr Davey.

The Government believes the spending level agreed for low-carbon power subsidies will allow the UK to meet goals to supply 30% of electricity from renewables by 2020 and also fund other low-carbon technology including nuclear and fossil fuel power plants where emissions are captured and stored.

But shadow energy and climate change secretary Caroline Flint said: "It is outrageous that on the day Ed Miliband committed to a tough cut in Britain's carbon levels by 2030, George Osborne and Ed Davey abandoned their target.

"This is a humiliating failure by the Liberal Democrats and a betrayal of David Cameron's promise to be the greenest government ever."

Environmental campaigners also reacted angrily to the news.

John Sauven, executive director of Greenpeace, described it as "a blatant assault on the greening of the UK economy that leaves consumers vulnerable to rising gas prices, and sends billions of pounds of clean-tech investment to our economic rivals".

And Friends of the Earth executive director Andy Atkins said: "The coalition has caved in to Osborne's reckless dash for gas and banged the final nail in the coffin of Cameron's pledge to lead the greenest government ever."

The agreement will also see a "capacity mechanism" established, with companies able to bid in auctions for support to provide flexible electricity supplies such as gas power, or for measures to reduce demand for energy, from 2014 if it appears that UK peak demand might exceed supplies.

The Energy Bill will also set up a Government-owned company with which firms can sign long-term contracts to receive a guaranteed price for electricity from low-carbon sources, which it is hoped will give investors certainty and will bring down the high cost of capital for schemes such as nuclear reactors and offshore wind.

The chairman of the House of Commons Energy and Climate Change Committee, Tim Yeo, said Mr Davey had "come out ahead on points" in negotiations, and the Treasury had provided a "realistic" package of support for green power.

Mr Yeo told Today: "I personally think that a couple of pounds a week - maybe rising to almost £3 a week - is a reasonable price for Britain to achieve a degree of energy security to reduce its total dependence on fossil fuels and to honour its commitments to cut greenhouse gases."

PA

Arts & Entertainment
Madonna in her music video for 'Like A Virgin'
music... and other misheard song lyrics
Sport
Steven Gerrard had to be talked into adopting a deeper role by his manager, Brendan Rodgers
sportThe city’s fight for justice after Hillsborough is embodied in Steven Gerrard, who's poised to lead his club to a remarkable triumph
News
Waitrose will be bringing in more manned tills
newsOverheard in Waitrose: documenting the chatter in 'Britain's poshest supermarket'
News
The energy drink MosKa was banned for containing a heavy dose of the popular erectile dysfunction Levitra
news
VIDEO
Have you tried new the Independent Digital Edition iPad app?
News
Much of the colleges’ land is off-limits to locals in Cambridge, with tight security
educationAnd has the Cambridge I knew turned its back on me?
Environment
People are buying increasing numbers of plants such as lavender to aid the insects
environmentGardeners rally round the endangered bumblebee
Sport
Australia's Dylan Tombides competes for the ball with Adal Matar of Kuwait during the AFC U-22 Championship Group C match in January
sportDylan Tombides was diagnosed with testicular cancer in 2011
Arts & Entertainment
Customers browse through Vinyl Junkies record shop in Berwick Street, Soho, London
musicBest exclusives coming to an independent record shop near you this Record Store Day
News
Ida Beate Loken has been living at the foot of a mountain since May
newsNorwegian gives up home comforts for a cave
Extras
indybest10 best gardening gloves
Arts & Entertainment
tvIt might all be getting a bit much, but this is still the some of the finest TV ever made, says Grace Dent
Arts & Entertainment
Comedian Lenny Henry is calling for more regulation to support ethnic actors on TV
tvActor and comedian leads campaign against 'lack of diversity' in British television
News
Posted at the end of March, this tweeted photo was a week off the end of their Broadway shows
people
News
peopleStar to remain in hospital for up to 27 days to get over allergic reaction
Arts & Entertainment
The Honesty Policy is a group of anonymous Muslims who believe that the community needs a space to express itself without shame or judgement
music
News
Who makes you happy?
happy listSend your nominations now for the Independent on Sunday Happy List
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Apprentice IT Technician

£150.00 per week: QA Apprenticeships: This company is a company that specializ...

1st Line Technical Service Desk Analyst IT Apprentice

£153.75 per week: QA Apprenticeships: This company is an innovative outsourcin...

1st Line Helpdesk Engineer Apprentice

£150.00 per week: QA Apprenticeships: This company has been providing on site ...

Sales Associate Apprentice

£150.00 per week: QA Apprenticeships: We've been supplying best of breed peopl...

Day In a Page

How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit