The Global Warming Policy Forum has accused the government of being the main driver of energy poverty as its Net Zero agenda is making electricity ever more expensive for low-income families.
Climate policy costs are adding £10bn a year to energy bills, paid disproportionately by poorer people.
Electricity prices 40% higher than in the absence of government policies
People who have electric heating are paying up to £500 a year extra
As the government is adding ever more policy costs onto energy bills and consumers face relentless price rises to pay for renewable energy and back-up power, the government has published its latest fuel poverty policy (Sustainable Warmth: Protecting Vulnerable Households in England).
The Government is clearly worried about the combined effect of lockdown and climate policy costs on low-income households and has published a set of measures intended to offer relief to these consumers. However, the policies announced are inadequate and dodge the main problem: the rising burden of the rising cost of green energy policies on electricity bills.
Climate policy costs are adding over £10 billion per year to the national electricity bill, about a third of which will be paid by households directly through their electricity bills, increasing the price by about 40%1 in comparison to what it would have been in the absence of policies.
There are approximately 2.2m households in the UK that use electricity for heating. Of these, about 1.8m are in England. These households are typically of lower income, with about a third having an annual income of less than £14,500 a year. Assuming a price of about £180/MWh (18p/kWh) an electrically heated household will be paying between about £1,800 per year for heating, of which about £500 a year is due to climate and energy policies.
Dr John Constable, GWPF’s energy editor, said:
The fuel poverty problem as it affects electrically heated low-income households is largely the creation of government policies and in particular the £10 billion a year subsidy cost of renewables, one-third of which hits households through their electricity bills and the remainder through the general cost of living as businesses pass on their costs.
Mr Kwarteng’s measures are wholly inadequate, barely scratching the surface of the electricity bill issue, and leaving the cost of living problem caused by his climate policies quite untouched. As the UK shifts towards electric heating to reduce emissions this problem, already serious, will only get worse.”
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