The Department of Energy and Climate Change (DECC) has hit back at a report by Civitas that is critical of the cost borne by UK householders to fund green subsidies.
According to the independent think tank, green subsidies such as the Feed-in Tariff (which is funded through charges levied on energy bills) will cost every British household £600 a year by the end of the decade. The report concludes that subsidies will make renewable energy a ‘burden’ to the taxpayer and will discourage innovation by distorting market forces.
DECC has refuted the findings saying that rising energy bills are more a product of global gas prices than government policies aimed at driving down the consumption of fossil fuels. DECC adds that despite the levies applied to fuel bills, average household bills will be £166 lower per year by 2020 than if nothing was done.
A spokesman said: “We don’t recognise these numbers. The report is a manifesto for locking the British economy into excessive reliance on imported gas from far-flung, unstable parts of the world. It ignores four things.
“First, it’s the global gas price, not green subsidies, that has primarily been pushing up energy bills. 60 per cent of the increase in household energy bills between 2010 and 2012 were caused by this. Investing in home grown alternatives is the only sure fire way of insulating our economy and bill payers from this volatility.
“Second, the costs of renewables are coming down, we’ve already cut the subsidies for onshore wind and solar and in future all green technologies will have to compete to deliver the best bang for the buck.
“Third, our household energy efficiency policies are more than offsetting the costs of clean energy investment. By 2020 the average household bill will be £166 lower than it would be if we were doing nothing. To address industrial competitiveness impacts, we are exempting and compensating the most energy intensive industries from certain policy impacts.
“And lastly, investment in renewable energy is helping support growth through jobs and investment – between 2011 and 2012 investment amounting to £12.7 billion, with the potential support of around 22,800 jobs.”