News Archive - 2009

Households will be paying £500 a year to subside wind turbines and tidal power stations by 2025, the energy regulator warned yesterday.

Almost a third of the average domestic fuel bill will be siphoned off to fund the construction of renewable energy sources and other Government green initiatives, according to Ofgem chief executive Allistair Buchanan. He told MPs that the levy was necessary to fight global warming and leave the country 'a nicer place to live for our children and grandchildren'.

The average household now pays around £100 a year - 9 per cent of a typical £1100 fuel bill - in green subsidies. The money is used by power firms to comply with Government initiatives designed to meet its target of generating a third of the country's power from renewable sources by 2020. But Mr Buchanan warned that costs of switching to a low-carbon economy will mean higher bills, which he said could soar between 14 per cent and 60 per cent over the next decade. He told the House of Commons Energy and Climate Change Committee that green subsidies will make up to 30 per cent of those higher bills by 2025.

'It is absolutely incumbent on us to represent clearly to consumers what it is costing them, so they fully understand what the cost is to make Britain a nicer place to live in for our children and grandchildren,' he said. 

Families should brace themselves for steep rises in their fuel bills, Britain's energy regulator warnes last night.Ofgem boss Allistair Buchanan said he feared a crisis in Russian gas supplies would 'push up prices' in the next few years.

Mr Buchanan said he feared bills could climb even higher due to Europe's growing dependence on gas supplies from overseas, mainly Russia.

The country's giant Gazprom accounts for a third of western Europe's gas imports. The regulator's research shows Europe could be affected by shortfalls of 41billion cubic metres by 2015, equivalent to two-fifths of Britain's annual consumption.

This is largely because delays are expected to six projects aimed at delivering higher output, such as the giant Shtokman field in Russia's Barents Sea.

Earlier this month energy watchdog Ofgem published the results of its 18-month investigation into the market for businesses and consumers.

Ofgem has proposed restricting but not banning - the ability of suppliers to roll-over customers to a fixed-term contract when their existing contract ends. It has also called for third parties to develop new codes of practice to encourage best practice in the sector.

Business minister Baroness Vadera said: 'Small businesses are facing significant pressure and are rightfully concerned about reducing their costs. It is critical that businesses protect their interests and shop around for an energy supplier that will providee the best value for money.'