Chris Huhne has admitted consumers will end up paying more through a new carbon tax
Friday December 17,2010 By John Ingham
HOUSEHOLD energy bills could soar by at least £500 under a Government plan to move to greener fuels, experts warned yesterday.
Energy Secretary Chris Huhne has admitted consumers will end up paying more through a new carbon tax but calculates it will only be an extra £160 by 2030.
But sources, including price comparison website uSwitch, believe more than three times that figure will be added to the average annual power bill of £1,157.
It would mean a typical family in Britain paying around £10 a week more for Mr Huhne’s “green revolution”.
The news comes as a Treasury document revealed yesterday that the wholesale price of electricity could rise by 72 per cent by 2030 – even without the addition of subsidies to support green energy.
Last night Dr Benny Peiser, of the Global Warming Policy Foundation, said: “This is politically unsustainable. There will be a huge public backlash if energy prices go up and up. In other countries energy prices are going down because they are not following this obsession.”
He cited research claiming that an alternative approach, including greater reliance on gas, could save Britain £700billion over the next 50 years.
Mr Huhne plans to raise £200billion through a carbon tax which will make coal, oil and gas-fired electricity more expensive and encourage investment in renewables and nuclear power.
There will also be top-up payments to guarantee revenues for low-carbon electricity even if the wholesale price falls.
However, Tory Euro MP Roger Helmer said: “I don’t believe climate change science is genuine, therefore I feel these efforts will be utterly wasted. This is a massive gamble that could cost the economy hundreds of billions of pounds.”
Campaign group Consumer Focus said: “Cutting our carbon emissions and improving our energy supply is essential but will come with a big price tag. Consumers can’t be expected to write a blank cheque. The Government must not lose sight of the fact that the energy industry tends to pass costs on to consumers with impunity.”
Mr Huhne said: “While prices will rise in the medium term, the additional impact of the reform packages will be small. But by 2030 consumer bills will be lower than if we did not reform the market.
“Without action, we face a real and growing threat to the security of our supply. We have a once-in-a-generation chance to rebuild our energy market, rebuild investor confidence and rebuild our power stations.
“Like privatisation before it, this will be a seismic shift, securing investment in cleaner, greener power. And delivering secure, affordable and low-carbon energy for decades to come.”
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