Ed Davey: Green energy tax will hit household bills

May 21, 2012 by  
Filed under Green Energy News

“We’re becoming more exposed to gas imports,” he said. “The real thing that’s
driving energy bills for households is the cost of global gas and global oil
and we need to try to make sure that our economy is better insulated.

“We’re having to import more and more gas as the North Sea oil gas supplies
run down, that’s going to leave our economy more exposed.”

However, asked whether the carbon floor price would lead to higher energy
bills for households, Mr Davey said: “Well, indeed it will do, because
what we want to do is to make sure that we move to low carbon electricity
generation. That’s very important.

“But also we’ve got to clean our energy and electricity generation.”

The carbon floor price is aimed at ensuring Britain complies with European
emissions–trading rules.

However, the policy has been criticised as ineffective and unfair, because
companies elsewhere in the EU will not face a floor price.

Official projections suggest that much of the floor price charge to UK companies
will actually be paid by consumers as firms recoup their costs through
higher bills.

The Treasury has estimated the floor price will raise £1.4 billion by 2015–16.

At least 40 per cent of that bill is expected to be paid by households, a
total cost of £560million.

Treasury estimates have suggested that the floor price floor price would add
as much as six per cent to household electricity bills, an additional £25
for the average family.

Mr Davey said Liberal Democrats did not support an expansion in nuclear energy in
the party’s last election manifesto, mainly due to “huge worries about the cost”.

He said: “I am determined that there will be no public subsidy for new nuclear.”

Developing shale gas technology was an “opportunity” to diversify the country’s
energy supply but the Government needed to be “cautious”, particularly in
light of environmental concerns, he said.

Mr Davey backed tight regulation of so-called “fracking” technology – which
blasts water, sand and chemicals at extreme pressure to release gas trapped
in rock – to prevent “significant environmental damage”.

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