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How much is green adding to our energy bills? Um… not very much.


We’ve all seen it splashed over the newspapers: Green policies are adding hundreds of pounds to the average energy bill. In the last couple of years there have been claims that we’ll see our bills go up up to £1000 a year; or £300; or £200 ; or 25%.

Energy bills are going up – but how much is green energy to blame? Hardly at all. © Sean Dreilinger

On top of this the Chancellor of the Exchequer, George Osborne, has claimed that “a decade of environmental laws and regulations are piling costs on the energy bills of households and companies”.

It’s true that our energy bills are going up – and it’s something that worries us all.

But while these newspapers may be selling out with their headlines, what they are saying isn’t actually accurate, as the majority of recent price rises haven’t been to do with green policies; but due to wholesale gas price rises.

A recent report found that wholesale gas prices added £290 to the average energy bill between 2004 and 2010 – compared to just £30 for support to renewables.

And that difference is set to rise: gas prices are expected to add another £175 by 2020.

Gas drilling platform on the tundra Western Siberia, Russia.Importing gas – and the rising cost of doing that – is the largest part of the increase is energy bills. © naturepl.com / Bryan and Cherry Alexander / WWF

It’s decision time for the UK on how we meet our future energy needs. Given that gas is set to become ever more expensive, investing in home-produced, renewable energy has to be a smart idea.

Yes, the upfront costs of shifting to a renewable energy supply are higher – so there will be some extra costs initially – but in the long run we’ll save money on running costs.

The costs of more advanced renewable technologies like onshore wind and solar PV are already falling rapidly and onshore wind could be cost-competitive by 2016.

Newer technologies like offshore wind, wave and tidal power do need support to mature – much like the nuclear industry did (and still does). But as these develop, we can expect to see more big falls in the cost of the electricity they produce.

In the long term, green policies are a sound investment for our economy. Unfortunately, that’s not the sort of headline that sells newspapers.

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