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Green generation targets could add to energy bills

Report states consumers may face increased charges as a result of higher green subsidies

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Higher subsidies could see consumers out of pocket

Brits could face additional charges on their energy bills as a result of government plans to offer subsidies to energy companies to speed up the transition to renewable technologies.

A new report has stated that funding would go towards encouraging energy companies to come on board with projects they might otherwise see as being uneconomical. This would include the likes of onshore and offshore wind farms, landfill gas sites, hydro power plants and biomass plants.

Consumers could be hit in the pocket

However, while the government is looking to meet its energy targets through this sort of subsidy, it will be consumers who are affected by the increase in prices.

According to the Taxpayers’ Alliance, which carried out the first analysis of the subsidies, payments will amount to some £22 billion overall by the end of 2020, with the money being put up by businesses and consumers through their energy bills.

The report states that consumers could be facing drastically increasing bills in the next seven years as a result of this.

Subsidies will rise each year

In addition to the subsidies that are being paid to try to meet renewables targets, it will also be the case that consumers’ bills assist with the payments for the Energy Company Obligation efficiency scheme, under which suppliers fit out homes with roof insulation and more modern boilers.

The Taxpayers’ Alliance said this will increase overall subsidies dramatically in the next few years.

In 2012/13, the government spent £2 billion on subsidies, but this is set to rise to £5.3 billion by 2018/19. This will see the average bill rise by £60 per year.

Matthew Sinclair, Taxpayers Alliance chief executive, said: “Targets that require massive investment in the energy sector, to install expensive technologies like offshore wind turbines on an enormous scale, will always mean profits for energy companies and much higher prices for consumers.

“If the government are serious about easing the pressure on people’s living standards, they need to take action and scrap lavish renewable energy subsidies.”

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