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Renewable subsidies add just £4 to energy bills, REA says

Green energy news – by GreenWise staff
24th October 2012
The cost of supporting renewable energy projects has added £4 to energy bills over the last two years – equating to a two per cent increase – analysis by the Renewable Energy Association (REA) shows.
The renewables trade body said the figures show that green energy subsidies are having a negligible impact on energy price rises, compared to other factors such as wholesale gas price rises. And because energy firms are increasing their prices still further this year, the REA claimed renewable supporting schemes will account for an even smaller proportion of energy bills this year.

Using Ofgem data that shows average dual-fuel energy bills have risen by £205 between July 2010 to July 2012, the REA has calculated renewables added £22 to the average household bill this year and support schemes for renewables have accounted for two per cent of total bill increases over the past two years. And it said a recently announced new round of price increases of around £80 means renewables would have a smaller impact on energy bills this year. 

The REA has published its findings ahead of a Commons debate today focusing on reforming the electricity market to improve competition in the electricity sector.

"The role of renewables in increasing energy bills is often greatly exaggerated. The figures show it's our reliance on fossil fuels that is costing us dear. Not only is it more affordable than people think to go renewable, but the public understands that our future national security and prosperity depend on it," REA chief executive Gaynor Hartnell said. 

She said more should be done to promote the benefits of renewables to the consumer in terms of competition. "Renewables make it possible for people and communities to supply themselves with heat or power. This introduces a whole new level of choice and competition into the energy markets. We'd like to see politicians from all parties fully grasp that potential," Hartnell said.

Today, green energy firm Good Energy joined the Big Six, announcing a nine per cent increase in its electricity prices.

This story was changed at 14.37 on Wednesday October 23 2012 to clarify that renewables added £22 to the average household bill this year already. The story had previously suggested that it was estimated they would following recent energy price hikes. 

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Renewable subsidies add just £4 to energy bills, REA says
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