Power market overhaul set to push up bills
PLANS to shake up Britain’s energy market were unveiled by the government yesterday, in a sweeping overhaul that looks set to raise household bills to pay for a greater mix in the country’s power supply.
Energy bills are forecast to jump by around £100 a year by 2030 under the plans, but the coalition insists that the long-awaited reforms will shave four per cent a year from the hike facing consumers without these changes.
Under the draft bill put before parliament yesterday, low carbon producers will be encouraged with guaranteed prices for green power.
This will be backed up by expensive taxes for fossil fuel generators, with a carbon price floor of £16 per tonne of carbon dioxide generated, rising to £70 in 2030.
The government aims to attract £110bn of new investment over the next decade to replace ageing energy sources, with a focus on domestic gas, wind and wave power.
The coalition has also placed importance on reviving the country’s nuclear power sector, which was dealt a blow earlier this year when E.ON and RWE pulled out of a £15bn scheme to build two new plants.
Rival firm EDF yesterday said it was working with nuclear regulators to extend the life of eight of its UK nuclear sites, which were due for decommissioning in 2016.
Energy secretary Ed Davey warned that the UK faces power cuts, soaring prices and environmental damage without the plans.
“The reforms will also be better for the economy, leaving us less vulnerable to rising global energy prices and supporting as many as 250,000 jobs in the energy sector,” he added in a statement.
Labour’s shadow energy minister Tom Greatrex welcomed the emphasis on renewables, but added: “There is nothing to break the dominance of the energy giants, nothing to simplify tariffs, and nothing to protect vulnerable customers from being ripped off.”