Ofgem data shows average dual-fuel energy bills have risen by £205 in the past two years from £1,105 in July 2010 to £1,310 in July 2012 whereas analysis by the REA based on Ofgem/DECC data shows support schemes for renewables over a similar period have contributed around £4 to energy bill price increases. According to a written Parliamentary questions answered by Charles Hendry on 19 June 2012 the estimated average amount added by the RO/FITs directly to a household electricity bill in 2010-11 is “£18 for the RO and 20p for FITs.”
That equates to 2% of total bill increases over the past two years. Or in other words, factors other than renewables subsidies are responsible for 98% of energy bill rises over the past two years. Analyses by both Ofgem and the Committee on Climate Change show that increases in wholesale gas prices have been the primary driver of energy bill increases in recent years.
Furthermore, the recently announced new round of price increases of around £80 means that renewables will account for an even smaller proportion of energy bill rises. At the same time, renewables are delivering broader household prosperity through growth, jobs and energy security. Renewables support schemes are expected to comprise £22 of average household bills this year.
“The role of renewables in increasing energy bills is often greatly exaggerated” said Gaynor Hartnell, Chief Executive of the REA. “The figures show it's our reliance on fossil fuels that is costing us dear. Not only is it more affordable than people think to go renewable, but the public understands that our future national security and prosperity depend on it.”
The Commons debate today focusses on reforming the electricity market to improve competition in the electricity sector. However, the REA is keen that the role of renewable energy is better recognised in order to help improve consumer choice and competition. For example, a recent study by uSwitch said that Government could do far more to promote solar power to help households save money.
“Renewables make it possible for people and communities to supply themselves with heat or power” Gaynor Hartnell added. “This introduces a whole new level of choice and competition into the energy markets. We'd like to see politicians from all parties fully grasp that potential. Support for renewables can drive a much more diverse and competitive market, not just green energy.”
The REA recently set out its 10 Energy Bill demands in a policy briefing. These include specific measures to make it easier for homes, businesses and communities to invest in generating their own power. The briefing is available on the REA website.
Further information:
Why energy prices are rising (Ofgem)
uSwitch: ‘Solar panels cut energy bills for two thirds of households’, 11th August 2012
