Skip to content

UK Energy Minister Warns Green Investors: We May Scale Back Your Subsidies

Emily Gosden, The Daily Telegraph

Michael Fallon, the energy minister, has said it would be “unfair” to add further costs and green levies onto consumer bills.

The comments are the strongest indication yet that the Conservatives may pledge to scale back existing green policy costs, as the party scrambles to counter Ed Miliband’s energy price freeze plan.

“Piling further costs and green levies on to energy bills is unfair to consumers,” said Mr Fallon at a reception by industry body EnergyUK at the Conservative Party Conference.

“We shouldn’t put British industry at a disadvantage against Europe and the US: for our manufacturers this would be assisted suicide.”

The Conservatives are understood to be reviewing all policies that are currently paid for through energy bills and looking at further exemptions from policy costs for SMEs and industry.

Energy suppliers say that policies initiated by the Coalition – such as the “energy company obligation” (ECO) efficiency scheme, and the carbon price floor tax – are already adding to their costs.

The “Big Six” suppliers are expected to raise their household energy tariffs by up to 10pc in coming weeks and are likely to blame the costs of ECO, which they say ministers have grossly underestimated, as well as rising network charges.

The Telegraph revealed ministers are already in talks over potentially extending the deadline for completing the ECO scheme, to try to stem further price rises. An extension is expected to be included in a consultation on the future of the scheme next year.

A new system of subsidies for nuclear power plants and wind farms, devised by the Coalition, will also be paid for by levies on energy bills. Households and businesses will have to pay £7.6bn a year toward building greener power plants by 2020 – about £95 per household – up from £2.35bn now.

Full story (subscription required)