Energy Bill Hikes 'Cut By Efficiency Schemes'

A new report claims government policies helping to insulate homes and promoting the installation of more energy efficient boilers are reducing the rise in gas and electricity bills.

Savings generated from energy efficiency policies are already having an impact and will increase over the next decade, the report from the Department for Energy and Climate Change (DECC) has said.

Household dual fuel bills are estimated to be on average 5%, or £64, lower now than they would be without these policies, it adds.

By 2020, average household energy bills will have risen by 6% in real terms but will be 11% or £166 lower than without the policies.

Nearly half of the average household dual fuel energy bill, £598, is made up of fossil fuel prices, with the second largest cost attributed to networks costs or transport or distribution of energy.

The report showed 85% of the rise in household bills between 2010 and 2012 was from wholesale energy costs and network costs.

Household energy consumption has been on a downward trend since 2005 partly because of the energy efficiency measures.

The freezing weather has raised concerns about gas supplies

Energy and Climate Change Secretary Ed Davey said: "Global gas price hikes are squeezing households. They are beyond any Government's control and, by all serious predictions, are likely to continue rising.

"We are doing all we can to offset these global energy price rises, and while we have more to do, this new study shows our policies are putting a cushion between global prices and the bills we all pay."

Steve Radley, policy director at EEF, the manufacturers' organisation, said: "This is a  wake-up call. Policies are already adding 30% to business electricity prices, and this will rise to 50% by 2020 and 70% by 2030.

"Measures to shield the most energy-intensive industries from a portion of the costs will make a difference but, unless we get a grip on spiralling policy costs, steeply rising electricity prices for the rest of the sector risk making the UK an increasingly unattractive location for industrial investment and undermining efforts to rebalance the economy."

Caroline Flint, shadow energy and climate change secretary, said: "The Government's underhand attempt to mask the real impact of its policies on families' energy bills is shameful. At a time when hard-pressed families and pensioners are seeing their incomes squeezed, only this out-of-touch Government could expect people to fork out thousands of pounds on new TVs, fridge freezers and washing machines.

"Instead of cooking the books to trick people into thinking their energy bills will be lower, ministers should get behind Labour's plans to overhaul the energy market and deliver fair prices for the public."

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