EDF Energy will bank windfall profits of an estimated £350m a year at the expense of British customers, when the Government introduces a new green tax.
The French-state owned utility would be the major beneficiary of Government plans to artificially raise the price of carbon allowances traded in the UK. The move is intended to make it more expensive to run fossil-fuel power stations than low-carbon nuclear plants.
This will substantially raise the price of electricity, according to two separate studies from KPMG and the Policy Exchange. A carbon price of €35 (£29) per tonne leading to an increase of £7 per megawatt hour would take the entire cost for the taxpayer to £2.5bn.
EDF acknowledged in November that a minimum carbon price of €35 translates to an extra £40 a year for each of Britain’s 22m households in increased energy bills – plus substantially more for industry and businesses.
Most of the extra money paid by consumers will go to the Treasury, since it collects proceeds from the sale of carbon allowances bought by gas and coal station owners.
However, EDF Energy will also be a major winner to the tune of approximately £350m because it already owns a fleet of existing nuclear power stations producing 13pc of Britain’s electricity.
The company will reap the benefit of the higher electricity price, but will not have to buy carbon allowances because nuclear plants do not emit greenhouse gases.