Ed Miliband’s Net Zero drive will add £160 to annual electricity bills by 2030 – despite wholesale energy prices falling over the same period, according to new research.
An analysis of costs that make up household electricity bills found that Britons will be paying £265 more a year by the end of the decade.
This is due to a rise in green levies, also known as policy costs, to help meet Labour’s ambition of decarbonising the UK’s electricity grid by 2030.
The extra charges will more than offset an expected £105 reduction in the cost of wholesale electricity as a result of cheaper renewable power.
It means an overall increase in average electricity bills of £160, or 16 per cent, by 2030.
A top boss at biggest energy supplier recently warned bills will increase by a fifth in the next four years due to rising costs of Government policies.
Rachel Fletcher, of Octopus Energy, told MPs ‘urgent consideration’ was needed to address the rise in costs, including levies paid through bills to support upgrades to gas and electricity networks.
But Mr Miliband, the Energy Secretary, later denied his Net Zero drive was keeping Britons’ energy costs high as he defended green levies on household bills.
Mr Miliband insisted that updating Britain’s ‘ageing electricity infrastructure’ was required whether the country continued with fossil fuels or switched to ‘clean power’.
He also stood by Labour’s promise to get bills down by up to £300 by 2030.
The analysis of household electricity bills was carried out by independent energy analyst Ben James.
His research suggested the average household will pay £1,126 for its electricity by 2030 compared with £966 today.
Among the forecast new charges will be £19 per year to help fund the new Sizewell C nuclear power plant, despite it not expected to produce power until the mid-2030s.
Households are also set to pay £91 per year in ‘balancing’ costs in 2030, according to the report.
These are costs associated with balancing supply and demand on the UK’s electricity grid.
They have risen as Britain makes the switch to renewables because, for example, the grid can often be overwhelmed by the amount of electricity generated, such as through wind farms.
When this happens, the grid operator pays to turn windfarms off.
Mr James told The Times that, while renewable power was crucial for British energy security, the Government ‘must ensure that the resulting system is cheaper’.
‘The single most important objective for consumers and for decarbonisation is making electricity cheap,’ he said.
‘Only 10 per cent of UK emissions come from electricity production. We will not eliminate the remaining 90 per cent – which comes primarily from heating and transport – without cheap electricity.’
He warned the Government was ‘locking in’ a historic amount of future costs with its investment decisions.
‘The decisions taken in the coming months and years will commit a significant proportion of UK bills for decades,’ he added.
‘It’s crucial that we ensure every new agreement delivers value for money.’
Mr James urged ministers to look at battery storage for energy produced through renewables as ‘one of the most promising levers for reducing bills’, as it can ‘lower the need for extra grid infrastructure’.
A spokesperson for the Department for Energy Security and Net Zero said: ‘We don’t accept this analysis, which over-estimates future costs and ignores the benefits of clean energy.
‘Energy bills are still too high, which is why the Government is taking urgent action to support families this winter, including expanding the £150 Warm Home Discount to 2.7 million more households.
‘The only way to bring down energy bills for good is by making Britain a clean energy superpower, which will get us off the rollercoaster of fossil fuel prices and onto clean, homegrown power that we control.’
