Net zero costs ‘will add £100 to household energy bills from April’
Blow to Miliband’s cheaper power pledge as cost of renewables projects set to balloon
Britain’s dash to net zero will fuel a £100 rise in household energy bills from next April, according to leading forecasters.
Energy analysts Cornwall Insight said the cost of connecting new wind and solar farms, construction of the Sizewell C nuclear power station and upgrades to the gas networks would all be felt in the form of higher bills next spring.
The research suggested that further rises will follow as the construction of pylon lines, underground cables, substations and Sizewell all accelerate.
The warning cast yet more doubt on Energy Secretary Ed Miliband’s pre-election pledge to cut household energy bills by £300 by 2030 – a promise he repeated last month.
Craig Lowrey, at Cornwall Insight, said investing in renewables would eventually reduce bills – but “first we need to lay the foundations. There are a lot of costs involved in the transition”.
He added: “Rising energy bills are never welcome, and this latest view of transmission charges – although only indicative – will add yet another cost to the long list of pressures on household finances.”
The average bill for a dual-fuel home currently stands at £1,720, but is already set to rise to £1,755 from October. Another rise is expected in January.
The jump at the start of next year is forecast due to seasonal increases in wholesale costs as demand for energy rises over the winter.
However, the £100 increase predicted from April has nothing to do with the wholesale cost of gas, which is actually forecast to fall slightly next spring.
Instead it is due to the cost of maintaining and expanding the UK’s power grid, with electricity network costs alone adding £30 a year – rising to £50 a year by 2028.
Green levies will add another £18, of which £12 is advance payments for building Sizewell C. Upgrading the gas network – partly to accommodate the introduction of green hydrogen – will add a further £53.
Cornwall Insight said: “Investment is needed to support the UK’s transition to a low-carbon energy system.
“As more renewable energy is generated in remote areas – such as onshore wind farms in Scotland and offshore wind farms in the North Sea – significant investment is needed to build new transmission lines and reinforce the grid to carry electricity around the country to where households are located.”
Most of the net zero investment will be paid for through standing charges, something Cornwall Insight said was “a point of increasing political and regulatory contention in recent years given … the inability of households to avoid standing charges through more flexible consumption”.
Household energy debts have risen from £1.3bn to £4.2bn since January 2020, with poorer households hit particularly hard.
Energy UK, which represents power suppliers, said the Government should rethink the levies added to bills.
The Telegraph: continue reading
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