Energy bills in the UK are nearly £2.5bn higher than they would have been if climate policies had not been scrapped over the past decade

Everyone is coping with rising energy prices, but recent research shows that scrapped climate policies over the past decade have had costly consequences. Tom Brook discusses in an article on the techradar website.

 

Cutting green initiatives has added £2.5bn to UK energy bills

Previous efforts to slash climate policies are now costing the average household £40 per year, according to studies

New research from Carbon Brief has shown that energy bills in the UK are nearly £2.5bn higher than they would have been if climate policies had not been scrapped over the past decade. Changes made by previous governments include cutting energy-efficiency subsidies, effectively banning onshore wind in England and scrapping the zero-carbon homes standard.

With energy bills set to rise by as much as 50% in April, the government is currently assessing how it can support struggling households. In an attempt to ease the current energy crisis, reports suggest that the government is considering further cuts to energy efficiency policies, cutting VAT on energy bills, and paying energy suppliers directly in order to shield customers from high bills.

However, although some of these policies may make an impact in the short term, many may cause more damage in the longer term. This is because Carbon Brief’s analysis shows that previous efforts to slash climate policies are now costing the average household around £40 per year. This figure may increase to £60 when future price caps are revealed.

What has caused the increase in energy bills?

Further analysis from Carbon Brief has revealed that nearly 90% of the increase in bills over the last year is due to the rising price of gas. Most of the remaining expected increase in bills is due to the cost of energy suppliers going out of business, whereas climate policy costs have already fallen and are due to drop further.

Will bills rise further?

Sadly, energy bills are set to rise even further in April, when the new energy price cap will come into effect. At this time, it’s estimated that the number of homes that are struggling to pay for their energy bills will triple.

Overall, it’s estimated that the number of homes under ‘fuel stress’ – those spending at least 10% of income on energy bills – is estimated to rise to 6.3 million households.

The new price cap won’t be announced until February 7, but many experts expect it to rise by about 50% to around £2,000. These higher prices could then last for around two years.

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5 thoughts on “Energy bills in the UK are nearly £2.5bn higher than they would have been if climate policies had not been scrapped over the past decade

  1. The article is both right but also deeply wrong. Starting with the right: indeed, UK “energy policy” (ha!) has flip-flopped around particularly with respect to energy efficiency measures. Had EE measures been implemented on a consistent basis households would use far less gas leading to much lower bills. A well renovated house could reduce gas use by 50%.

    Deeply wrong: the current electricity market is based on marginal pricing (much loved by economists of a traditional mind set). More renewables (on or off-shore) would not make a blind bit of difference to current wholesale elec prices as long as marginal pricing is used to define these prices, because gas sets the marginal price. Had the market been moved to a basket-pricing approach, electricity wholesale prices would be less than half what they are now. Not an assertion – a reality that can be proved.

    Many journalists commenting on current energy price hikes lack knowledge. They are amateurs, giving a PoV. Which is fine, but they need to be recognised as only marginally more knowledgeable than the general public. Reflected in the article which addressed symptoms and one obvious problem (EE)

    As for the politicos, they lack the intellectual curiosity to ask even basic questions (on energy) compounded with advice from the likes of BEIS which takes a religious view on these matters (markets are sacred – if there are problems the answer is more markets). “Our Market which art in Heaven, hallowed be thy name etc.”.

    1. As ever you make excellent points, Mike. For readers outside the UK, we would never know. Thanks so much.

      1. Thanks for the kind comments. I have done an in-depth article for Euractiv on this subject (windfall profits because of bad market structures and asymetric RES funding. Should be published next week. I will let you know when it is – perhaps it will be interesting for the UK (btw: the windfall profits on RES in the Uk are being enjoyed by… the Uk gov’ which raises the interesting question – why don’t they use these profits to help those in energy poverty.

  2. You will be interested to learn that the former UK Energy secretary, Sir Ed Davey, the LIBERAL DEMOCRAT leader, has just appeared on BBC TVciting precisely these statistics, making it plain that since be left office seven years ago investment in insulation by the UK have fallen dramatically- according to this study by 90 per cent. Sadly none of the Conservative supporting newspapers have written about this. Why?

    1. Glad to hear that Sir Ed did that on the BBC. Curious that none of the Conservative supporting papers have written about this. They still have a chance . . .

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