Green levy on UK electricity bills set to rise by more than a fifth

Stay informed with free updates

You can sign up to myFT Digest of UK Energy delivered straight to your inbox.

The environmental charge added to electricity bills in the UK is expected to rise by 23% by the end of 2010, according to official forecasts. This highlights the upfront costs of switching to renewable energy and reignites the debate about how to pay for it.

Those core charges are set to rise from $12 billion in 2024-25 to $14.8 billion in 2029-30, according to figures released this week by the Office for Budget Responsibility alongside the budget.

The increase is often driven by rising costs in the so-called capacity market, which pays gas-fired power plants to stand by when needed.

This back-up market is becoming increasingly important given the shift to intermittent renewable power, with the OBR predicting costs will increase from $1.3 billion in 2024-25 to $4.1 billion in 2029-30.

The cost of electricity bills is expected to increase as the government encourages people to replace gas boilers and petrol cars with electric heat pumps and electric cars.

Campaigners have long urged the government to move the levy from electricity tariffs to gas tariffs or fund it through general taxation.

But both options are difficult because they risk increasing heating costs for those who currently use gas-fired boilers – the majority of households – or straining the Treasury's balance sheet.

Adam Berman, policy and advocacy director at trade group Energy UK, said the current system of funding outdated renewable energy subsidy schemes through legislation was regressive.

But he argued it was fair to put the cost of key renewable energy schemes on electricity bills now, given their role in meeting the country's future ambitions for clean, affordable domestic power.

This funding will benefit customers and businesses by providing more stable prices through cheaper renewable energy and strengthening the country's energy security, he added.

Greg Jackson, founder of Octopus Energy, said: The OBR's predictions about rising electricity levy costs are shocking. To modernize and grow the economy, people need to switch to electric heating and cars. But ever-increasing electricity bills will make this more difficult for everyone. Governments can help by cutting the costs of renewable energy rather than increasing them by shifting costs to dirty fuels and introducing regional pricing.

The OBR forecast includes a 35% increase in the projected cost of the government's scheme to guarantee the price of electricity from renewable energy developers, known as contract for difference. This is expected to increase from $2.3 billion in 2024-25 to $3.1 billion in 2029-30.

The actual cost of your plan will depend on wholesale prices at the time. If wholesale prices rise above government-guaranteed levels, developers will have to repay the scheme.

suggestion

Labor has increased the budget for the latest contract auction under the plan as part of its efforts to meet its target to decarbonize the electricity system by 2030.

The OBR's forecasts do not include a levy on the ECO energy efficiency scheme or so-called supply tariffs to support green energy.

The total of 14.8 billion in 2029-30 is a 35% increase compared to 10.9 billion in 2023-24.

The figure includes $600 million a year in reduced electricity bills for vulnerable households and $100 million to $200 million a year from next year to finance green gas.

The Department for Energy Security and Net Zero said: In a world of volatile fossil fuel markets, we are confident that clean power systems are the cheapest to build and operate. The impact of legislation through 2030 will depend on the path we take to achieve the policy, which we will establish in due course.

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos