Households are facing a fresh price increase on their soaring energy bills as part of plans for green power. The controversial carbon tax, which is set to be outlined before Christmas, comes at the end of a week when ScottishPower became the third supplier to unveil a huge price hike.
If the plan is adopted, energy suppliers would collect charges from customers and the money could be paid to power companies investing in low-carbon technologies like nuclear and wind. An industry source said: “It is one option on the table, but it would make bills rise.”
Energy minister Charles Hendry has said the overhaul of funding will be “the biggest thing since liberalisation and privatisation of the electricity market”.
Because the plans are at an early stage, it is not known the extent of the prices rises.
A separate Treasury consultation is due soon on formulating a base price for carbon which would artificially raise the cost of emission permits, making low-carbon power more economically viable.
Britain’s “big six” energy companies have told Energy Secretary Chris Huhne that this alone would not be a big enough incentive for them to invest in new nuclear power stations.
Sara Vaughan, Eon’s UK director of regulation and energy policy, said: “It’s only part of the answer to a very complex question that we all want the Government to get right.”
Last week ScottishPower announced it was putting its prices up by an average of two per cent from Thursday. Fellow power giants SSE and British Gas had already announced they would be increasing their prices on December 1 per cent and 10 per cent respectively.
Responding to the rises, Ann Robinson, director of consumer policy at price comparison website uSwitch.com, said: “The increase may be moderate, but the timing is miserable. “Seven out of 10 people cut down or rationed their energy use last winter because of cost. Winter price hikes will simply force even more down this route.”
Sunday Express, 21 November 2010
WINTER DEATHS TO SOAR AS 5 MILLION HOMES STRUGGLE TO PAY FUEL BILLS
MORE than five million British households will struggle to stay warm this winter and the number of people likely to die in freezing temperatures is set to rise sharply, a leading charity warned yesterday.
There are increasing concerns for poorer pensioners and other vulnerable people, said National Energy Action.
Fuel poverty is defined as when a household needs to spend more than 10 per cent of its income keeping warm.
Campaigners say it is caused by poorly insulated homes, low incomes, and the continued high cost of energy bills.
Gas and electricity prices have soared more than 80 per cent in the last five years.
Just last week British Gas announced a seven per cent hike despite owners Centrica showing profits of more than £2.2billion. The rise comes as the number of families struggling to pay their heating bills reaches 5.5million and excess winter deaths this year are expected to be higher than ever.
Action’s Maria Wardrobe said: “The reality of fuel poverty is living in a cold, damp home, which can lead to health problems and seriously worsen existing conditions such as chest complaints with the possibility of this leading to heart attacks and strokes.
“Fuel poverty will continue to grow at alarming rates unless people are able to reduce their energy bills by a national programme of energy efficiency and Government schemes must be effective at targeting help at the most vulnerable.”
Daily Express, 19 November 2010
WHY OUR WINTERS WILL BE A LOT HARDER TO GRIT AND BEAR
Sunday Express, 21 November 2010
BRITAIN faces one of its toughest ever winters, whatever the weather has in store. Price rises and spending cuts combined with the continuing tough economic climate will mean a shortage of festive cheer for millions.
Inflation rose to a four-month high of 3.2 per cent in October, due largely to fuel price increases, and is likely to peak at 3.5 per cent when 20 per cent VAT is introduced in January.
Recent energy price rises will heap further pressure on householders already struggling to cope. Families and pensioners will bear the brunt of rising costs.
The pain begins next month as British Gas raises electricity and gas prices by seven per cent, pushing the average household bill for a dual-fuel customer up from £1,157 to £1,239, and Scottish and Southern Energy imposes a 9.4 per cent increase on its gas tariffs.
The elderly will also be hit hard, especially next year, when the Government’s winter fuel payments are cut. The £250 paid to those under 80 will drop to £200 and the £400 for the over-80s will fall to £300. Pensioners’ leaders warn the cuts will cost lives. [...]
Energy regulator Ofgem warns soaring energy bills this year are just a taste of what is to come over the next decade. A spokesman said: “The unprecedented combination of the global financial crisis, tough environmental targets, increasing gas import dependency and the closure of ageing power stations casts reasonable doubt over whether the current energy arrangements will deliver secure and sustainable energy supplies.”
Chief executive Alistair Buchanan said that as a result, energy bills could rise by between 14 and 25 per cent by 2020. “In 2017 we get to the really sweaty-palm moment in terms of possible shortages,” he added. “It is the scale of collapse in energy supply from 2013 until 2017 that is profound and worrying.”
The country’s power generation system urgently needs £200billion of investment. Yet with the recession continuing to bite, it is the worst possible time to find it.
Five of the 14 coal-powered stations must retire by 2015 and seven of the 10 nuclear stations will close by 2020. Britain is legally obliged to reduce carbon emissions by at least a third by 2020 and 80 per cent by 2050, and increase renewable energy to 15 per cent by 2020.
