Households across Britain will be charged around £100 a year more for their electricity bills under plans to build nuclear power stations and wind farms over the next 20 years, Energy Secretary Ed Davey has revealed.
Average electricity costs are set to increase from £573 currently to £669 by 2030, according to Government figures.
Introducing the draft Energy Bill yesterday, Mr Davey said bills had to go up, but the alternative – doing nothing – would mean bills would end up £200 higher.
However, critics have claimed that without the Government’s ‘carbon floor price’ – a tax that artificially raises the cost of electricity from gas and coal power stations – energy would actually be cheaper.
But Mr Davey said: “These reforms will ensure we can keep the lights on, bills down and the air clean.”
He warned that without the reforms, there could be blackouts affecting millions of homes in years to come.
uSwitch.com said it was concerned that consumers would become the “forgotten part of the equation” in the energy reforms.
Lucy Darch, the site’s director of energy, said: “We are facing an ‘energy trilemma’ where the Government is attempting to balance security of supply, a low carbon future and affordability.
“Something has to give and unfortunately at the moment the scales are tipping away from affordability.”
Lisa Greenfield, energy analyst at Confused.com, said: “The Energy Secretary has freely admitted household energy bills are on the rise.
“However, as a result of the increased investment in clean energy generation methods and reducing the UK’s reliance on imported gas, such increases would actually be four per cent lower than if the UK continued to be reliant upon global markets.”
Consumer Focus said a “fine line must be walked” on the balance of the Energy Bill.
Audrey Gallacher, director of energy, said: “With a hefty price tag attached to the changes to be made, consumers need to be assured that not a penny of the funding that comes out of their bills will be wasted.”
Save money on your gas and electricity bills
Compare all energy prices with uSwitch and save up to £400.
Twitter: My Finances
Join the conversation at #news_myfinances