Energy company RWE npower has warned that the Government's "heroic" assumptions on energy savings are too optimistic.
In a report published today, the UK energy firm predicted the average annual energy bill for a household will increase £240, to £1,487, by 2020.
The report indicates that support in low-carbon technologies would add £82 to the average energy bill by the end of the decade, up from £34 this year, and £12 in 2007.
The “big six” power provider claimed the reason for starting their Energy Explained initiative was to “create a better understanding of the facts behind the energy industry and to help people make informed decisions about the energy they use”.
A contemporaneous report from the UK Energy Research Centre (UKERC) warns that plans for a clean energy future risk being undermined by a lack of trust.
The three-year research concluded that the British public fully support an energy system change and are willing to pay extra for clean and reliable energy.
Professor Nick Pidgeon, who led the research team, said: “Our participants saw the bigger picture of energy system transformation, and they were overwhelmingly committed to moving away from fossil fuels towards renewable forms of energy production, and to lowering energy demand”.
However, both reports highlight a lack of public trust in government and energy firms, a prominent factor in RWE npower’s reasoning for presenting the facts as they see them in their report.
Professor Pidgeon said trust was critical in ensuring people will be willing to invest in clean energy.
“Trust issue is critical. We have seen protests round energy system developments like wind farms over recent years. There won’t be all the investment that’s needed on energy systems if the energy firms and the government can’t persuade people to trust them.”
Lack of transparency
In a candid statement the new RWE npower CEO, Paul Massara, stressed the need to address misconceptions over energy costs that had arisen due to a lack of transparency in the industry.
“These misconceptions are, at least in part, due to a historic lack of transparency in our industry. We haven’t been as clear as we could have been about bills, tariffs and what makes up the cost of energy
and, because of this, myths have arisen about the actual influence energy companies have over energy costs.
“The disparity between perception and reality is very concerning, and something that needs to be urgently addressed.”
Mr Massara said consumers need to be informed about infrastructure investment and there was a need to be more upfront.
“The main factor behind rising costs is government policy and regulation to fund this country’s transition to a more efficient economy, with modern infrastructure and warm, insulated homes for all.
“The fact is that if people don’t take action to reduce energy consumption, their bills are going to rise. If we can’t be upfront about that, we won’t be able to convince people to make big changes to be more energy efficient.”
Covering the exposure
Greg Barker, minister for energy and climate change, rejected parts of the report claiming government action had helped reduce the costs from spiralling fossil fuel prices.
“Global gas prices, not green policies, have been primarily pushing up energy bills. That is why it is vital we crack on with securing investment in a diverse energy mix that includes renewables and new nuclear, as well as gas.
“We must also continue to drive up the energy efficiency of the nation’s housing stock, particularly the homes of the most vulnerable households.”
Mr Barker added: “In 2020, bills will be £166 lower than they would be if we left ourselves exposed to global price shocks, left our homes leaking energy, and left future generations to deal with climate change.”