UK’s ‘dash for gas’ will boost bills, warns committee

Posted at December 16, 2012 » By : » Categories : News » Comments Off on UK’s ‘dash for gas’ will boost bills, warns committee

The influential Committee on Climate Change (CCC) has today warned that increased reliance on unabated gas generation could add £600 to the average household bill over the coming decades.

As the Energy Secretary Ed Davey gives the go ahead for the exploitation of shale gas to restart, the CCC’s report, Energy prices and bills – impacts of meeting carbon budgets, concludes that it is “economically sensible” to invest in low-carbon technologies over the next 20 years.

While investment in low-carbon technologies will put an extra £100 on household bills by 2020, the cost of continued reliance on unabated gas-fired generation carries with it a much heavier financial burden, warns the report.

“Our analysis confirms the benefits of adopting a strategy which invests in low-carbon technologies. This provides a portfolio of energy sources as insurance against the risk of high gas prices. It lessens the impact on household bills in the long term and enhances the competitiveness of UK industry,” explains Committee chair, Lord Deben.

According to the report’s analysis, the main cause of energy bill increases since 2004 has been the international price of gas, which accounted for 62% of the rise, while investment in electricity/gas networks accounts for just 16% of the increase.

Despite continued complaints that energy efficiency and low-carbon policies add to household bills, each accounts for less than 10% of the increase since 2004.

And while the report admits that commercial and industrial users are likely to face a slightly higher proportion of bill increases arising from low-carbon policies, some 20-25%, it makes that caveat that energy costs make up a very small part of costs in these sectors.

Overall, says the report, low-carbon policies are likely to add 1p to every £10 spent in the commercial sector and 6p to every £10 spent on the manufactured goods.

Much of the increases could, therefore, be offset through energy efficiency measures, says the report. Although some sectors, like households reliant on electric heating and some energy intensive industries, will be more adversely affected. This, say the CCC, should be taken into account in future government policy.

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Related stories:
UK government gives go ahead for shale gas fracking to restart (13-Dec)
UK Chancellor’s Autumn Statement confirms a ‘dash for gas’ (6-Dec)
CBI warns UK government away from over-dependence on gas (15-Oct)
Shale gas no ‘silver bullet’ for UK but will bring benefits (19-Sept)
Climate Change Committee condemns UK government’s ‘dash for gas’ (14-Sept)

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