Impact of green measures on household energy bills

The independent Committee on Climate Change has a report showing what % of household energy bills can be attributed to “green” measures.

Looking at the impact of green measures between 2004-2010 (p12), the report says:

(c) Current total energy bills
Combining our analysis of electricity and gas bills for the typical dual-fuel household indicates that the average combined bill increased from £605 per household in 2004 to £1,060 in 2010. Of this £455 increase (75%, compared to general inflation of 16% over the same period):

  • Around £380 was unrelated to low-carbon measures, with £290 due to increases in wholesale costs reflecting increases in the price of gas and supplier costs and £70 due to increasing transmission and distribution costs, and £20 due to VAT.
  • Around £75 was due to low-carbon policy costs, within which it is important to distinguish between costs of £30 towards decarbonising the energy mix through support for investments in low-carbon power generation including renewables, and costs of £45 for funding of energy efficiency measures, without which bills could have increased further over this period.

Our analysis therefore clearly shows that it is not the case that energy bills are currently high due to costs of low-carbon measures. From 2004 to 2010 bills increased by £455 to £1,060, primarily in response to increased wholesale gas costs, with only £30 (7% of the increase and 3% of the bill) due to the costs of decarbonising the generation mix, and £45 (10% of the increase and 5% of the bill) due to funding improvements to the energy efficiency of homes.

Here’s the full report:

Household Energy Bills – impacts of meeting carbon budgets

And here’s some illustrative graphs:

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Posted on January 23, 2012, in Energy & Climate Change and tagged , , . Bookmark the permalink. 1 Comment.

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