Energy firm warns bills to rise by more than government forecasts

 
Wind farm in Barrow in Furness RWE Npower says it supports government plans to invest in renewable energy

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Annual household energy bills by 2020 are likely to be £100 higher than government projections, says energy firm RWE Npower.

It says official predictions of future energy savings are over-optimistic and warns the annual average bill will be £240 above current levels by 2020.

The firm says it supports government plans to renew power networks and build more renewables such as wind and solar.

But it says there must be more honesty about the costs of this investment.

It comes as a new poll by Cardiff University suggests that the public is willing to pay extra for clean and reliable energy.

'Heroic assumptions'

Start Quote

What's interesting is that, despite what you might see in parts of the media, it's clear that very broadly the public want a long-term commitment to clean energy”

End Quote Professor Nick Pidgeon Cardiff University

Both reports acknowledge, though, that the public does not trust energy firms or government - and both say trust must be restored if energy policy is to succeed.

In Npower’s case, the trust exercise starts with a publication setting out exactly how bills are likely to rise in order to renew the creaking energy supply system and install clean energy supplies.

The firm says it believes the government has underestimated the effect of this investment on bills, because its calculations rely on “heroic” assumptions about the energy individuals will save through efficiency and behaviour change.

This criticism has frequently been levelled at the government’s projections.

The firm warns that unless people strive much harder to reduce energy use, the average combined fuel bill in 2020 will be about £1,487 a year - that's £200 more than now and £100 more than the government projects.

The company says it is essential for energy firms - often accused of profiteering and misleading customers - to be honest about future bills.

'Blame game'

The new chief executive of Npower, Paul Massara, said: “Energy costs are rising. This is an indisputable fact, and it’s time that all of us involved in energy in the UK are upfront about it.”

He went on: “We are very clear that we do not want to be critical of government - rather, we want to ensure customers have the facts, so that they understand that for this cost, they will get a low-carbon economy, security of supply and warm, insulated homes.”

He said his firm was calling for an end to the energy “blame game”.

Public views on renewable energy

  • 82% worried about fossil fuel import dependency
  • 79% keen to reduce fossil fuel usage
  • 85% supportive of power from the sun
  • 75% supportive of wind power
  • 74% concerned about climate change

Source: Cardiff University

The report is issued coincidentally as the academic body, the UK Energy Research Centre, warns that plans for a clean energy future risk being undermined by lack of trust.

A poll of about 2,500 people commissioned through Cardiff University suggests that the public is worried about dependency on fossil fuel imports (82%); keen to reduce use of fossil fuels (79%); supportive of power from the sun (85%) and wind (75%); and concerned about climate change (74%).

The report’s authors say people are willing to pay extra to obtain a stable energy supply. The lead author, Prof Nick Pidgeon, said people would also pay more overall to avoid sudden peaks in prices. He said the researchers had not tested specific figures in the poll because projections about future energy costs were “notoriously slippery”.

Keeping the lights on
Floodlights at a football match The government says its policies will prevent blackouts

“What’s interesting is that despite what you might see in parts of the media, it’s clear that very broadly the public want a long-term commitment to clean energy,” he told BBC News.

“But the trust issue is critical. We have seen protests round energy system developments like wind farms over recent years. There won’t be all the investment that’s needed on energy systems if the energy firms and the government can’t persuade people to trust them.”

He said young people dependent on electronic gadgets were very worried about the prospect of black-outs and willing to pay to avoid them.

But he envisages a Catch-22 in which the government and energy firms fail to deliver the energy future that people want, because the public don’t trust them.

'Claims'

The Association for Conservation of Energy is one body that does not trust the firms.

Its director, Andrew Warren, told BBC News that Npower's projections on energy savings could not be trusted: "The big energy companies have definite form, when they start warning that they can't deliver the energy savings schemes that government mandates at the price that government projects.

"They claim at the start that the scheme will cost them far more than the official forecasts, in order to try to minimise the size of the obligation placed upon them."

The government said its policies would keep the lights on and help to smooth bills by reducing dependency on the gas imports that have caused recent jumps in energy prices.

Greg Barker, Minister for Energy and Climate Change, said: “It is right that we have a grown-up discussion about the impact of energy investment. However, global gas prices, not green policies, have been primarily pushing up energy bills.

“In 2020, bills will be £166 lower than they would be if we left ourselves exposed to global price shocks, left our homes leaking energy, and left future generations to deal with climate change.”

Follow Roger on Twitter @rharrabin

 

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  • rate this
    0

    Comment number 185.

    "He said young people dependent on electronic gadgets were very worried about the prospect of black-outs and willing to pay to avoid them."

    9 times out of 10, young people dependent on electronic gadgets aren't the ones paying the bills!

  • rate this
    +3

    Comment number 184.

    NO! This isn't about the price of energy rising -it's about PROFITS rising and the government should wake-up and stop it.
    I'm sick of getting scr*wed and the government shrugging it's shoulders.
    I spent last winter in my dressing gown with only my living room heated -and they tell me to try and cut my consumption?!

  • rate this
    +2

    Comment number 183.

    What is the point of using energy to transport people to and from places consuming power for lighting and air-conditioning where the people will run on powered belts?

  • rate this
    +34

    Comment number 182.

    "Mummy, I am cold!"

    "Never mind. We will go down to the Food Bank in a bit. It will be warmer there."

  • rate this
    +13

    Comment number 181.

    Deliberately closing down coal mining industry amounts to treason, letting the country down, and all because of a crowd of rabid Thatcher right wingers wanting to get their teeth into the unions?

    Millions of tons of coal energy beneath our feet, but now UK sovereignty is threatend at the whim of foreign powers. Importing gas by ship and pipeline puts our country in a very precarious situation

  • rate this
    +2

    Comment number 180.

    I feel Sick

  • rate this
    +78

    Comment number 179.

    I double insulated my loft, replaced all my windows with double glazing and have a more efficient boiler. I've also turned the temperature down on the thermostat yet my energy bills continue to rocket.
    Now Npower say I have to "strive much harder to reduce energy use?". So it's all my fault then is it?.

  • rate this
    0

    Comment number 178.

    " Killer Boots Man
    If we all used half the amount of energy then prices would double."

    If your argument is correct, if we double our usage then unit prices should halve. Do you seriously think that will happen?

    Prices are determined by supply and demand. Reduce demand and prices will fall. If you reduce your demand an no-one else does, you make that saving anyway.

  • rate this
    0

    Comment number 177.

    @105

    SShhhhh! for gods sake!!! They'll start charging for it! ;-)

  • rate this
    -2

    Comment number 176.

    Home generation works best. Solar panels pay for themselves after 5 years.

  • rate this
    +2

    Comment number 175.

    @139 "We need to cut ourselves free from these greedy pigs and invest in renewable energy, take charge of our own lives, not charged for living"

    It's investment in 'renewable energy' that's causing most of the increase!

    p.s. you can't actually renew energy. Energy cannot be created or destroyed, you can only change its state. The very phrase is deluded.

  • rate this
    +5

    Comment number 174.

    We could solve all of our energy problems if people didn't endlessly whine about wind turbines and nuclear power.
    Fund research into Nuclear Fusion and have free energy forever, or bow to the wished of energy companies and be forever at the mercy of these profiteering, selfish predators and the moronic little englanders who know not the first thing about wind power

  • rate this
    +3

    Comment number 173.

    Ban the standby button, and bring back the on off switch.

  • rate this
    -12

    Comment number 172.

    God has given us enough renewables to keep us going until we figure out the fusion reactor. Why can't we simply use them.

    Global warming/Climate change/Climate disruption is a government money trough based on computer models that haven't predicted anything correctly, ever.

    Cheap energy keeps people and industry healthy. Expensive energy does neither.

  • rate this
    +3

    Comment number 171.

    We live in a relatively stable location, geographically speaking. Nuclear power, whilst people hate the idea of it is the only thing that realistically will keep us going until a more permanent solution is found. So why not build more nuclear?

    I know there's fears over similar disasters like Japan, but the earthquake there wasn't the problem. It was building the cooling system below sea level

  • rate this
    0

    Comment number 170.

    I blame the socialists & do-gooders, if only they hadn't messed up by letting workers in nationalised industries get away with doing such poor work.

    But then again, perhaps it was actually those in charge who should be blamed for letting them get away with it, or for focussing the news on this minority.

    It's all politics and politicians, and it benefits NOBODY else, proof is the NHS story today.

  • rate this
    +4

    Comment number 169.

    Energy companies bought the infrastructure and production facilities at a knock down price and since then have made billions ripping us off and now they want us to pay for the upgrades, they own the stuff they should pay for it out of their profits just like normal business owners do.

  • rate this
    +2

    Comment number 168.

    warn = happen

  • rate this
    -17

    Comment number 167.

    mikewow@153 "Things like Rail, Health and Energy should be non-profit public services."

    Clearly someone that doesn't know science or engineering. eg. those on the 'left' are just as clueless as those on the 'right'.
    Trains, tracks, wind turbines and pipes have to be replaced (the laws of thermodynmics guarentee that), hence 'profits' are needed to replace and invent new more efficient kit.

  • rate this
    +1

    Comment number 166.

    The Government should hold a stake in all energy production in the UK, the at least if we are going to get turned over for the profit we will be getting something back and having genuine oversight in the companies would not be a bad thing either.

 

Page 27 of 36

 

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