News release: 20 November 2012

Response to government announcement on energy bills

Why the energy bill plan won’t help consumers get a better deal

Think tank Green Alliance warned today of a risk to increased costs for some consumers in Ed Davey’s announcement on energy bills.

Matthew Spencer, director of Green Alliance said:

“The government’s plan is a distraction as energy bills will continue to go up until we create a market for energy saving. Reforming energy bill tariffs can reduce the difference between those paying the most and the least for their energy, but it can’t bring bills costs down for everyone. With this plan, many are actually likely to see their bills go up.

“The good news is that there are savings in excess of £10 billion a year available to UK electricity consumers, largely because of the widespread use of inefficient appliances. If the Coalition aims to help hard pressed consumers they must introduce a market for ‘negawatts’ in the forthcoming energy bill which would encourage energy companies to pay people to upgrade to more efficient household appliances.”

Green Alliance has carried out extensive research on energy bills and found that:

• Energy bill switching has a relatively small effect because it rewards a minority of active consumers at the expense of the majority of passive consumers
• Ofgem estimates that the average profit on a £1,300 duel fuel bill was £45 in 2012, which suggests that there is little room to bring down bills by squeezing energy company profits
• McKinsey have estimated that the 40% of electricity demand could be avoided by 2030, saving in excess of £10 billion per year
• Household energy bills are rising mainly due to increasing fossil fuel prices, particularly gas prices which have stayed high despite the economic downturn
• In Texas energy efficiency measures are saving electricity consumers over $300 million a year.
• An energy efficiency feed-in tariff is a simple way the coalition could incentivise a market in 'negawatts' in the forthcoming energy bill. See  Green Alliance's infographic explaining negawatts and the consumer benefits of an energy efficiency feed-in tariff  

Matthew Spencer  is available for interview.

For more information contact Alastair Harper on 07903966635