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How will we pay for the Energy Bill? With our energy bills!

An illuminated light bulb on green grass

Excuse me while I have a Dr Evil from Austin Powers moment, but – ‘one hundred and ten b-i-l-l-i-o-n pounds’. That’s what the government thinks we need to update our ageing energy system and keep the lights on.

It sounds like a lot of money. No, let’s be clear, it is a lot of money. So the natural next question is who’s going to foot the bill? And the answer? Yes, you’ve guessed it, we will.

Not through our taxes though, oh no. The cost of ensuring that energy companies invest in new energy generation is going to be added to our ever increasing gas and electricity bills.

Investing in the future

This investment is needed. None of us want power cuts to be a feature of our daily lives. And since our creaking energy infrastructure needs a major overhaul, it makes absolute sense to ensure that we’re reliant on cleaner, greener alternatives in the future – such as renewable energy and nuclear.

Meanwhile the cost of doing nothing and relying on importing gas from overseas could be just as – or even more – expensive. This is why the government’s Energy Bill, published today, is so necessary.

Keeping a close eye on costs

My point is that we’re being asked to collectively cough up billions to pay for this investment (businesses will foot the bill too). It is only natural that we expect some assurances from the government that it will be delivered at the lowest possible cost..

This requires some basic things to be put in place. There needs to be transparency about the contracts negotiated between the government and energy generators. There’s got to be scrutiny of the decisions made by ministers with a clear role for consumer representatives to make sure that contracts deliver value for money. And contracts need to be presented to Parliament before they are signed, to make sure that the government is held to account for their decisions.

You would expect this for any other major public project. Think about the level of scrutiny that the Olympic Games costs were put under – and their budget was £9.3 billion. Or think about how the £3.6 billion High Speed Two rail project costs have been put under the microscope.

With energy prices right at the top of your financial concerns, it is absolutely vital that ministers make sure that this process is as rigorous and robust as possible. And Which? will be poring over the Bill over the next few weeks and pressing for it to be toughened so that affordability for consumers is right at its heart.

Comments
Guest
frankhanley says:
30 November 2012

Profits made by the Electric & Gas suppliers should pay for the new plant & stations

Guest

They do, although they’re short sighted enough not to use existing profits but rather increase the cost and use these new profits. 🙁

Guest

I cannot see the point in this debate, you can insulate a home completely but at some point need to switch the heating on.If the current increases in gas and electricity continue at the rate since 2005,no one other than the rich will be able of afford to heat their homes. It is outrageous that heating is becoming a luxury for a lot of people,alongside a roof over your head and food to eat it is a basic of life. I feel the government has totally lost the plot on this issue as naturally they are not affected by price rises having ample income to pay increases. I just wish people in Britain would take to the streets like our continental neighbours(not violence) to show our parliament that we have all had enough!

Guest

I do agree with Which? that consumer interests need to be put at the heart of the energy bill if they are going to be asked to cough up through their energy bills to fund what is needed. In particular I do feel consumers will need to be somehow shown, up front and all along the way, that improvements under the bill do genuinely offer the best value for money means to meet UK’s energy needs taking least impact to the environment also into account as well as possible breaking up of UK. Also I feel domestic consumers, need to be properly protected aginst being ripped off by their own energy supplier(s) as compared to other energy suppliers – ie to make sure all folk pay the same contribution regardless of how active their current supplier may, or may not, be in making improvements under the bill. Therein however lies a fundamental question – bearing in mind the future beneficiaries of projects completed under the bill should folk pay for it by family, by household, by person etc and who should be exempt; toddlers, teenagers, unemployed, vagrants, addicts, pensioners, handicapped, prisoners, MP’s, Royalty, lower wage earners etc etc. Another question it seems to me needs sorted out up front is whether business (large and small) and government (central & local) consumers should pay for the projects needed as well as domestic consumers. I personally don’t see why they should not although the business/government costs in doing so will no doubt feed into the price domestic consumers pay for goods and services but making them pay a fair proportion according to the significance of their carbon consumption should at least focus their efforts on reducing business/government waste of energy and thereby ensure project costs for us all are reduced – as energy capacity needed should be reduced.

Guest

will those who’ve tied in come out worse for having done so, when measures Which described in recent newsletter are put into place?

Guest

If you’d like to talk exclusively about wind farms, our latest Conversation may pick your fancy: https://conversation.which.co.uk/energy-home/got-a-wind-farm-nearby-you-could-save-on-your-energy-bills/

Guest

With all the debate about wind energy showing that there are some doubts as to the total cost efficiency both in generating and building the wind farms WHY is there no mention of tidal wave generation. With the Bristol Channel/RivernSevern having the second highest tidal range in the world, – some 50feet- surely the tidal barrage suggested some years ago ought to be re-visited.? Again it would be costly to build but once installed the generation could be relied upon throughout the twentyfour hours. Having had Solar Panels fitted in July this year I am already benefitting from the sun and have already had a credit electricity bill in spite of the very poor summer!! Government help for ALL householders with a south facing roof to install panels would surely be a good idea?

Guest

Ken Thomas – tidal energy seems an under-exploited resource. I wonder why – it may be much more expensive. Wind farms are inefficient in the main, private solar panels are expensive and, until recently, their feed-in tariff was ludicrously high (at our expense).
Some interesting information on tidal energy can be found at:
http://en.wikipedia.org/wiki/Tidal_barrage

and

http://www.energy.siemens.com/hq/en/power-generation/renewables/hydro-power

Guest
John H Hutchinson says:
8 December 2012

Sirs, It is an obviously ill-conceived