By EMILY BEAMENT AND HOLLY WILLIAMS

Household energy bills will rise £240 a year by 2020 due largely to the
mounting cost of government green policies, energy giant RWE npower has warned.

The “Big Six” energy providers said profits were not to blame for rising
bills and that consumers should know the true cost of investment in greener
energy production and efficiency programmes, which it said will be the main
driver behind a hike in bills from £1,247 today to £1,487 by the end of the
decade.

Paul Massara, npower chief executive, said: “Government policy is rightly
delivering the transformation we need to address the UK’s poor housing
stock and encourage investment required in new infrastructure – but
achieving these aspirations comes at a cost, and this is what needs to be
clearly communicated to consumers.”

RWE npower said support for low-carbon technologies alone would add £82 to
the average energy bill by the end of the decade, up from £34 this year and
£12 in 2007.

The cost of investing in low-carbon power sources accounts for less than 3
per cent of the average household bill, but this will rise to 5.5 per cent
by the end of this decade, it added.

Meanwhile, energy profits have risen from £18 on the average dual-fuel bill
in 2007 to £59 this year and npower predicts that profits will rise to £71
in 2020, staying constant at around 5 per cent of the bill.

Greg Barker, minister for energy and climate change, said of the npower
report: “Global gas prices, not green policies, have been primarily pushing
up energy bills. That is why it is vital we crack on with securing
investment in a diverse energy mix that includes renewables and new
nuclear, as well as gas.”

He said government policies were keeping bills lower, with a typical
household saving £65 today and £166 by 2020, compared with if the UK
remained reliant on fossil fuels, failed to tackle climate change and did
not make homes more efficient.

A separate report also found that while Britons are prepared to pay for a
shift to renewables, they do not trust the government or power companies to
deliver a clean, secure and affordable energy system.

Mistrust was generated when people were told bills would go up to pay for
clean power, and then saw “Big Six” profits soar, the researchers warned.

Researcher Dr Catherine Butler said: “There’s a real sense of anger about
the profit-making nature of energy companies when it’s seen as a basic
need, not a consumer good.”


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