Bills to rise to pay for energy upgrade

Energy bills are set to rise by an average of £12 a year to pay for a £24bn upgrade of Britain's gas and electricity networks, the regulator Ofgem has announced.

Latest ITV News reports

Ed Davey vows to cut energy bills

The coalition Government is absolutely determined to help cut energy bills for consumers, reduce costs for businesses and bring down our emissions.

We need to make our energy supply fit for the 21st century, and in a world of rising gas prices we must power our homes and businesses in a much more efficient way.

If you look at all our energy policies together with energy efficiency for example and our reforms to tariffs, we believe that people's bills will be lower in 2020 than they otherwise would have been because of the way we're helping people save energy.

– Energy Secretary Ed Davey

Firms to be offered energy efficiency incentives

  • Financial incentives will also be offered to firms and individuals that install more efficient equipment, such as better freezers in supermarkets.
  • Firms could also be paid to commit to permanent reductions in their electricity use, and an obligation on energy firms to help secure efficiencies extended to cover business premises.
  • Better labelling of products and an awards scheme to highlight firms that use only highly-efficient products are also included in the consultation.
  • Officials said any new measures would have to be carefully worked out to avoid undermining any of the existing schemes, such as the Green Deal.

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Households to fund £7.6bn green investment

The Energy Bill will allow energy companies to charge households an extra £7.6 billion until 2020, to go towards low-carbon electricity infrastructure.

Consumers could be paying for low-carbon power sources such as wind farms Credit: PA Wire

An estimated £110 billion is needed in the next decade to renew the UK's ageing electricity infrastructure, with much set to go into low-carbon power sources such as wind farms.

Critics say the changes will be paid for by sharp rises in bills but Mr Davey insists state support for low-carbon electricity will cost the average household less than £100 a year.

And he said that he was "absolutely determined" to more than compensate for that by expanding efforts to encourage energy efficiency measures and lower energy demand.

A 10% reduction would save £4 billion in 2030, the Department for Energy and Climate Change (DECC) calculates, and reduce carbon emissions equivalent to those of a large city in a year.

Ed Davey to publish Government's Energy Reform Bill

Energy Secretary Ed Davey will set out fresh proposals to slash demand for electricity as he publishes a blueprint for energy that critics say will massively increase households bills.

Ed Davey, Secretary of State for Energy and Climate Change Credit: Gareth Fuller/PA Wire

The long-delayed Energy Bill, formally published today, authorises ministers to almost treble investment in "green" power generation to £7.6 billion, up from £2.35 billion this year.

New government energy scheme could add £94 onto bills

An independent report examining the costs of the Government's new energy efficiency programme, the Energy Company Obligation (ECO) scheme, has found it could add £94 to consumer energy bills next year.

The Energy UK report's findings also revealed that the cost of the Department of Energy and Climate Change's energy model is significantly greater than was originally estimated.

The industry has long been concerned that the Department of Energy and Climate Change had underestimated the costs of its new ECO scheme. This independent report by NERA supports our fears as it shows when the right numbers are put in, the cost to households doubles or more. This has to be sorted out now and we are calling on Government to work with us so that customers get the insulation they need in a sensible and cost-effective way. We have also written to consumer groups asking them to come and discuss these findings and help with the solution.

– Angela Knight CBE, Chief Executive of Energy UK

Ofgem: Energy industry faces 'unprecedented challenge'

Energy regulator Ofgem has welcomed the Government's energy bill plans, but warned the industry faces an "unprecedented challenge" ahead.

In a statement, the regulator's Senior Partner for Markets, Andrew Wright said:

Ofgem welcomes today’s announcement by DECC on the future of energy policy. We will continue to work constructively with Government to get the best outcome for consumers both now and in the future.

Ofgem has played a key role in advising consumers and Government of the challenges Britain faces in attracting significant investment. In 2009 Project Discovery warned consumers that Britain’s energy industry faced an unprecedented challenge and concluded that changes to the current energy arrangements would be needed to deliver secure and sustainable energy supplies.

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Industry insiders: Lower bills are an 'heroic assumption'

Drax Power Station near Selby, as the Government outlines an Energy Reform bill that will see energy bills rise by around  £100 by 2020.
Drax Power Station near Selby, as the Government outlines an Energy Reform bill that will see energy bills rise by around £100 by 2020. Credit: PA

Energy Secretary Ed Davey has claimed that adding around £100 to annual household energy bills by 2020 will reduce costs in the long term, but this was described by an industry insider as an "heroic assumption", ITV Business Editor Laura Kuenssberg said.

Another industry source cast doubt on the government's assumption that energy efficiency will offset increasing costs.

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