Afternoon:
14°c
Fuel bills to rise by £230 in drive towards green energy
Nicholas Cecil, Chief Political Correspondent15.07.09
Homes face higher electricity and gas bills under an expansion of wind power and home insulation programmes being announced today.
The Government's Carbon Transition Plan is aimed at meeting targets for reducing greenhouse gas emissions and expanding renewable energy schemes by 2020.
Ministers were also looking at plans for low-carbon transport and thousands of "green jobs".
The Government is pledged to "carbon budgets" to cut emissions of 34 per cent by 2020 and at least 80 per cent by 2050. But figures suggest the green power drive could lead to fuel bills rising by almost £230 a year by the end of the next decade.
Energy secretary Ed Miliband is expected to promise that costs will be much lower, although some rises are inevitable.
Among today's schemes is a "pay as you save" programme of loans to insulate homes, with the money repaid from savings on energy bills.
Those who install solar panels or wind turbines will be paid through a "feed-in tariffs" programme for the electricity they generate. There are also plans to increase large-scale renewable energy, in particular wind with plans for 4,000 onshore turbines and 3,000 offshore.
Mr Miliband today warned there would be "upward pressures" on prices whatever the energy mix. He said the high-carbon route would force Britain to import more fossil fuels, while there would also be costs in shifting to low-carbon energy.
The Tories accused ministers of failing to address energy over the past 12 years. Shadow energy secretary Greg Clark said: "The scramble to catch up with Europe will be more costly than if action to reduce reliance on oil and gas had been taken in a planned way."
Reader views (2)
In Germany, energy companies *are* making massive investments in renewable power out of their profits. They are doing so because there is are appropriate tariff structures in place to reward investment in technologies such as solar and wind power.
Energy company profits are not nearly as vast as the investment needed. The capital has to be borrowed, and then interest and capital has to be repaid from the money obtained for the electricity generated. Which is why profits are necessary. No profit means no repayments, means no loan, means no investment, means no change.
I've made the same calculation about my boiler. If I bought a new more efficient one on borrowed money, the saved fuel would be worth less than the interest payments. So I haven't. If fuel gets more expensive and/or if new boilers and installations are subsidized, a new boiler might become worthwhile. Otherwise it'll have to wait until my old one wears out.
- Nigel, London
Why are the energy companies not spending this money from their enormous profits? If the public are to pay for new infrastructure then we should be charging the energy co's to use it. If it is to be a tax then I want it ringfenced and not just slopped into El Gordo's overall tax take.
- Mark, London
