There is a lot of news this week about the energy price rises and various people are blaming carbon and social policies for these increases. Below is an article from the CCC, the governments own committee, explaining in detail the breakdown of these actual costs.
In order that discussion remains fact based, we thought it appropriate to repeat some of the key findings from our energy prices and bills reports. This note also includes a new estimate that energy bills will have to increase by around £10 (1%) to cover costs of low-carbon policies in 2013/14.
- Very significant energy bill increases in recent years have been mainly due to increases in the price of gas in international markets, with only a small part of the increase due to low-carbon policies.
- Annual energy bills for the typical dual fuel household (i.e. a household using gas for heating and electricity for lights and appliances) increased by £520 between 2004 and 2012, from £610 to £1,130.
- The vast majority of this increase is due to changes in the international price of gas.
- Around £30 of the increase is due to policies which support investment in low-carbon technologies, with a £45 increase due to support for investment in energy efficiency improvement, which improves energy affordability for vulnerable consumers.
- Whatever the overall bill increase in the year ahead, low-carbon policies will contribute around £10 for the typical household.
- Energy bills are expected to increase by around £100 in 2020 due to low-carbon policies. This comprises around £70 related to the Electricity Market Reform and £30 due to the carbon price underpin.
- A further £20 increase per household will be required from 2020-2030 to support low-carbon investments. This would be sufficient to meet the proposed target to reduce the carbon-intensity of power generation to 50 gCO2/kWh by 2030.
Investment in low-carbon power generation technologies over the next two decades is a strategy which offers significant benefits compared to the alternative of focusing on investment in conventional gas-fired generation.
More of the article here - http://www.theccc.org.uk/blog/ccc-analysis-low-carbon-policies-account-for-only-a-small-part-of-energy-bill-increases/
