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UK utility says green energy policies will add £240 to household energy bills

16 July 2013

On July 15, one of the country’s biggest energy suppliers,RWE npower, said that Government investment in infrastructure and energy efficiency alone will cause annual energy bills to rise by 19% to £1,487 by 2020. The coalition believes that its energy policies, which involve billions of pounds of investment in low-carbon transmission networks and power plants, will cut bills.

RWE npower chief executive Paul Massara defended the need to raise investment in new infrastructure, but said the government needed to better communicate the fact that consumers' bills will be affected by higher costs.

"This isn't about shifting responsibility - energy suppliers (also) need to play a big part in communicating this message and supporting customers," he said.

“Government and energy suppliers need to be much clearer about the facts behind rising energy costs, so we can present one clear message to consumers. Energy costs will rise, and the only way to control of this is taking action to reduce consumption.”

RWE npower says it makes around 5% profit in its retail business and that its findings showed future tariff increases will be down to factors out of its hands.

The Government defended its policies upon publication of the report.

Greg Barker, minister for energy and climate change, said that the price of gas continued to have a bigger impact on bills than green policies. “That is why it is vital we crack on with securing investment in a diverse energy mix that includes renewables and new nuclear, as well as gas,” he said.

The cost of policy and regulation will account for 22%, or £329, of all bills by 2020, compared with 15%, or £185, today, RWE npower claimed in its report, The Changing Cost of UK Energy.

It estimates that the cost of supporting low carbon technologies will rise from £12 per annual bill in 2007 to £82 per annual bill in 2020.

It said households' bills will rise mainly due to the cost of government programmes to encourage greener forms of energy production and energy efficiency and to ensure sufficient capacity is available.

The amount of money suppliers have to spend on transporting electricity and gas in Britain will also increase.

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