Britain’s “energy and climate change” policies – including subsidies for wind farms and nuclear power stations – will add 41 per cent to the price of electricity in the UK by 2030 according to forecasts by the energy department.
Green measures including billions of pounds of subsidy for low-carbon generation will lift the price of electricity from £149 to £210 per MwH, the government’s own officials have predicted.
That forecast comes as ministers are poised to announce that they have struck a deal to guarantee the price of power from a new nuclear power station at Hinkley Point for decades into the future.
The energy department has predicted that actual bills will fall by 11 per cent by 2030 as household products become more energy-efficient millions of people insulate their homes, more than offsetting the rise in green subsidies.
But critics suggest this is optimistic given the paltry take-up of the coalition’s flagshipGreen Deal scheme, which helps households install energy-savings measures.
Green subsidies have been in the spotlight since Ed Miliband announced that a Labour government would freeze household energy bills in 2015. SSE raised its prices by 8.2 per cent last week in the first of what is expected to be a wider round of price rises from the industry.
That has prompted a scramble by Tory ministers to find green policies which can be reined back to ease household bills. David Cameron, the prime minister, has blamed many of those policies on Mr Miliband’s time as energy secretary.
At the moment, however, low-carbon subsidies only account for less than a tenth of the typical household bill. (Up from around 5 per cent five years ago.) Yet their impact on the price of household energy is set to surge in the coming years as a result of the coalition’s current energy bill.
The new centrepiece scheme, known as the “levy control framework”, will give energy groups £7.6bn a year to support low-carbon generation by 2020 – up from £2.3bn last year. That measure will alone add £95 a year to the average household bill, a rise of 7 per cent.