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Green policies could drive up energy bills

Joanna Faith
Written By:
Joanna Faith

Household bills could rise by £240 by 2020 as a result of the government’s green energy policies, RWE npower has warned.

It said the impact of unprecedented investment in new infrastructure and the cost of improving energy efficiency in people’s homes mean bills could rise to £1487 by the end of the decade.

However, Climate Change minister Greg Barker said wholesale gas prices, not green initiatives, would make bills mroe expensive.

The energy firm has called on government and industry to come together to give consumers a clear message about rising energy costs.

Paul Massara, RWE npower CEO, 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.

“The fact is that if people don’t take action to reduce energy consumption, their bills are going to rise. If we can’t be upfront about that, we won’t be able to convince people to make big changes to be more energy efficient.”

The RWE npower report published today said transportation costs will add an additional £114 on the average domestic bill by 2020, while the cost of rolling out smart meters will add £24.

It also said commodity costs currently make up 45% of the bill – but by 2020 this will only be 35%, as other costs become make up bigger portions of the bill.

Massara added: “This isn’t about shifting responsibility – energy suppliers need to play a big part in communicating this message and supporting customers. We’ve got to remove confusion and complexity out of energy, which is why we’re developing simpler bills and tariffs, and offering energy efficiency support and advice to all of our customers. But the public need to hear a clear and consistent message across the board if we’ve got any chance at all of helping them to tackle rising costs.”