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

News
scienceExcitement from alien hunters at 'evidence' of extraterrestrial life
Life and Style
Customers can get their caffeine fix on the move
food + drink
News
newsRyan Crighton goes in search of the capo dei capi
Extras
indybest

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
Actors front row from left, Jared Leto, Jennifer Lawrence, Meryl Streep, Ellen DeGeneres, Bradley Cooper, Peter Nyongío Jr., and, second row, from left, Channing Tatum, Julia Roberts, Kevin Spacey, Brad Pitt, Lupita Nyongío and Angelina Jolie as they pose for a
film
Sport
sport
Life and Style
techCould new invention save millions in healthcare bills?
Sport
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Voices
A meteor streaks across the sky during the Perseid Meteor Shower at a wind farm near Bogdanci, south of Skopje, Macedonia, in the early hours of 13 August
voicesHagel and Dempsey were pure Hollywood. They only needed Tom Cruise, says Robert Fisk
News
peopleEnglishman managed quintessential Hollywood restaurant Chasen's
Life and Style
food + drinkHarrods launches gourmet food qualification for staff
Arts and Entertainment
Michael Flatley prepares to bid farewell to the West End stage
danceMichael Flatley hits West End for last time alongside Team GB World champion Alice Upcott
Life and Style
Horst P Horst mid-fashion shoot in New York, 1949
fashionFar-reaching retrospective to celebrate Horst P Horst's six decades of creativity
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
i100
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Life and Style
news

As Voltaire once said, “Ice cream is exquisite. What a pity it isn’t illegal”

Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
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 apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Network Engineer - CCNP, Hedge Fund, London

£50000 - £60000 per annum: Harrington Starr: Network Engineer - CCNP, Hedge Fu...

Senior Network Engineer-CCIE, Multicast, Low Latency

£60000 - £70000 per annum: Harrington Starr: Senior Network Engineer-CCIE, Mul...

Network Infrastructure Engineer

£30000 - £50000 per annum: Harrington Starr: Network Infrastructure Engineer (...

Network Engineer (CCNP, BGP, Multicast)

£35000 - £45000 per annum: Harrington Starr: Network Engineer (CCNP, BGP, Mult...

Day In a Page

All this talk of an ‘apocalyptic’ threat is simply childish

Robert Fisk: All this talk of an ‘apocalyptic’ threat is simply childish

Chuck Hagel and Martin Dempsey were pure Hollywood. They only needed Tom Cruise
Mafia Dons: is the Camorra in control of the Granite City?

Mafia Dons: is the Camorra in control of the Granite City?

So claims an EU report which points to the Italian Mob’s alleged grip on everything from public works to property
Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Once the poor relation, the awards show now has the top stars and boasts the best drama
What happens to African migrants once they land in Italy during the summer?

What happens to migrants once they land in Italy?

Memphis Barker follows their trail through southern Europe
French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

The ugly causeway is being dismantled, an elegant connection erected in its place. So everyone’s happy, right?
Frank Mugisha: Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked

Frank Mugisha: 'Coming out was a gradual process '

Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked
Radio 1 to hire 'YouTube-famous' vloggers to broadcast online

Radio 1’s new top ten

The ‘vloggers’ signed up to find twentysomething audience
David Abraham: Big ideas for the small screen

David Abraham: Big ideas for the small screen

A blistering attack on US influence on British television has lifted the savvy head of Channel 4 out of the shadows
Florence Knight's perfect picnic: Make the most of summer's last Bank Holiday weekend

Florence Knight's perfect picnic

Polpetto's head chef shares her favourite recipes from Iced Earl Grey tea to baked peaches, mascarpone & brown sugar meringues...
Horst P Horst: The fashion photography genius who inspired Madonna comes to the V&A

Horst P Horst comes to the V&A

The London's museum has delved into its archives to stage a far-reaching retrospective celebrating the photographer's six decades of creativity
Mark Hix recipes: Try our chef's summery soups for a real seasonal refresher

Mark Hix's summery soups

Soup isn’t just about comforting broths and steaming hot bowls...
Tim Sherwood column: 'It started as a three-horse race but turned into the Grand National'

Tim Sherwood column

I would have taken the Crystal Palace job if I’d been offered it soon after my interview... but the whole process dragged on so I had to pull out
Eden Hazard: Young, gifted... not yet perfect

Eden Hazard: Young, gifted... not yet perfect

Eden Hazard admits he is still below the level of Ronaldo and Messi but, after a breakthrough season, is ready to thrill Chelsea’s fans
Tim Howard: I’m an old dog. I don’t get too excited

Tim Howard: I’m an old dog. I don’t get too excited

The Everton and US goalkeeper was such a star at the World Cup that the President phoned to congratulate him... not that he knows what the fuss is all about
Match of the Day at 50: Show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition

Tom Peck on Match of the Day at 50

The show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition