Businesses face 26% energy bill rise

Gas ring Gas prices could rise if the government's policies are implemented

Businesses' energy bills could rise by 26% in the next decade owing to policies to cut emissions in the UK.

However, domestic bills would only rise by 1% in the same period, according to reports published by the Department of Energy and Climate Change.

The estimates came as Energy Secretary Chris Huhne delivered the first annual energy statement to Parliament.

He called for input from various groups into changing the way in which the UK consumes and produces energy.

Cost

Smart meters, renewable heat, wind power and other renewable technology were all highlighted as ways to create a low carbon future.

"The era of cheap, abundant energy is over. We must find smart ways of making energy go further, and value it for the costly resource it is, not take it for granted," Mr Huhne said.

"And even as we reduce overall demand for energy, we may need to meet a near doubling in demand for electricity, as we shift industry, transport and heating onto the grid.

"There are big choices and big trade-offs in how we do this."

Among the documents released as part of the review was a document that outlined the estimated impact of policies on energy prices and bills.

Were the policies to be implemented immediately, a typical medium-sized business could see a 14%, or £175, rise in bills.

By 2015, the effect would be that bills would be 11%, or £150, higher than in 2009. By 2020, bills would be 26%, or £368, higher than in 2009.

The impact on households would be lower, the report said, because of the take-up of greater insulation of homes and micro-generation, such as solar panels.

The typical home would see an immediate 4%, or £42, rise in bills if the policies were implemented.

By 2015, bills would be much the same as in 2009. By 2020, bills would be 1%, or £13, higher than 2009.

Shadow energy secretary Ed Miliband accused the Conservatives and Liberal Democrats of employing the same "rhetoric without substance" in office that they used in opposition.

Smart meters

The papers include a government ambition to speed up the implementation of smart meters in every home in Britain.

The previous administration said that smart meters - which show exactly how much gas and electricity is being used in a household - should all be installed by 2020.

Although the coalition wants this done quicker, it has not set a fresh date and is appealing for submissions on how the process could be sped up.

It is also studying the implications for personal data safety raised by smart meter technology, and whether more safeguards are needed.

Security concerns have been raised regarding the amount of personal data held on the devices.

It could also make clear the exact times householders tend to leave their home, or when they sleep, by looking at their energy usage.

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