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
    +9

    Comment number 325.

    305 - "It's amazing how many people appear to think that solar panels work 24 hours a day, and that we never get windless days"

    - and as soon as you point this out, your comment gets marked down because this HYS is plagued by green fools who prefer to ignore the inconvenient truth because it doesn't fit their faith!

  • Comment number 324.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +26

    Comment number 323.

    In many countries watchdogs protect the public against corporate excess.
    In UK likes of Ofgen are apologists for the industry.
    Westminster & its laws only serve corporate interests. (Directorships...)
    5- yearly elections are won by -corporate owned- media acting on a dumbed down population (National curriculum..)
    Government ignores its own manifesto.
    And all without firing a shot.

  • rate this
    +2

    Comment number 322.

    296. CommonSense

    Yes most of those are good. You forgot end migration, which would alone do all we need to have a gently falling population. So without that your measures would be quite reasonable and necessary.

  • rate this
    +1

    Comment number 321.

    don't the energy firms & government get it greed & capitalism fail when the majority people can no long afford to pay outrageous prices increases every 9 to 12 months,when the government is cutting peoples ability to live & survive.In Britain soon it be survival of the fittest not the rich if uk public don't wake up to what the tories are doing

  • rate this
    +3

    Comment number 320.

    " Robin
    look how much trouble C4 got into with "The Great Global Warming Swindle". "

    Since there were more demonstrable lies, myths and factual misrepresentations in the 2 hours of the GGWS than in just about any other programme I have ever watched, then it is hardly surprising Ch4 got into trouble. After all, it was commissioned by their history and religion unit, not their science unit!

  • rate this
    +2

    Comment number 319.

    How long does it take for a wind turbine to produce as much energy as went into obtaining the materials from which it is made, manufacturing the hardware, installing it, connecting it to the Grid and commissioning it?

  • rate this
    +4

    Comment number 318.

    Well, you should all be greatful that we have first class ministers of Parliament, who, it is said, are worth a lot more salary :)
    In my lifetime I have seen various Parliaments of various persuasions, kill off manufacturing industries - Cars, Motorcycles, Aircraft - you get the picture. Now we have to rely on other Nations for almost everything. Long live profit at any cost. Bankers?

  • rate this
    +8

    Comment number 317.

    As a mechanical engineer working within the energy industry I find all the nonsense spouted by Government and energy providers frustrating. Wind and solar energy is an effective 'top up' to conventional power generation but not a source of regular reliable energy. Why not consume our current nuclear waste to produce energy through prism reactors?

  • rate this
    +6

    Comment number 316.

    May one ask a hypothetical question?? Mostly of those of the blue brigade..If Thatcher hadn't destroyed the mining industry..and if they hadn't sold off the power companies..would prices be A..Lower ...B The same ...or C Higher ...because with all the BS they spout..they never get down to the nitty gritty...are we being conned by the free market concept..or are the power companies saints...!

  • rate this
    +2

    Comment number 315.

    Before you all get carried away complaining, someone has apparently solved our energy problems by developing a paving slab that 'creates' energy from people walking on it.

    http://www.bbc.co.uk/news/business-23281950

    Now if we only add windmills beside motorways to catch the wind from passing cars, we should be home free!

    I searched for "cheap lobotomy" but there are no customer reviews...

  • rate this
    +11

    Comment number 314.

    The huge green subsidies allow rich people & landowners to convert these assets into 25yr guaranteed income, paid for by everyone else. Government ministers & MP's also jump on the bandwagon by becoming highly paid owners/directors of the green energy companies. It's a rip off and we'll still need to build dozens of gas power stations for base load which renewables cannot supply.

  • rate this
    +13

    Comment number 313.

    Why is it along with the majority of people in this country that I constantly have the feeling that i'm being ripped off with utilities, food, broadband, bus fares, you name it?? Is it because we are being ripped and the recession just an excuse to put up prices,reduce benefits etc because considering 'there's no money left' the govt ? have a happy knack of finding it when it comes to wars etc.

  • rate this
    +1

    Comment number 312.

    Nearly 50% of the bills we see over a year are made up from the green taxes of government.

    The green taxes have delivered an unreliable source of wind power and thats pretty much it.
    Meanwhile we are decades behind regarding nuclear infrastructure and we are perversly burning wood chips in our coal powered stations because the EU has issue's with coal.

    A devious thieving farce.

  • rate this
    +53

    Comment number 311.

    We the tax payer have given energy companies billions of pounds to improve their companies and infrastructure, and they still want more money. Are they broke? Maybe our energy companies should receive the same treatment as benefits claimants.

  • rate this
    +2

    Comment number 310.

    Another mess made in Eton

  • rate this
    +1

    Comment number 309.

    And all because the politicians world wide,with the connivance of media have fallen for the "green"issues, for"global warming"and for the penalising of citizens by greedy government to impose fraud upon citizens whilst doing nothing to stop their friends in the Banking system from brazenly stealing the monetary wherewithal of citizens with little or no democratic accountability!
    All paries corrupt

  • rate this
    +2

    Comment number 308.

    in Saudi the people get $250,000 each there share of there oil and gas I am 50 British and still waiting for my share of our oil and gas

  • rate this
    +5

    Comment number 307.

    And yet year on year profits soar with these companies and the only happy people are share holders there is no way out we have a weak government not able or unwilling to rein them in as most are sitting on the boards on hefty salarys only in the UK !

  • rate this
    -1

    Comment number 306.

    Seeing as how, through lack of all previous Governments planning ahead, we do not currently (or WAY into the future) have a viable nuclear, oil, coal, wind, or water generated forms of energy ...I EXPECT MY FUTURE BILLS TO SPIRAL OUT OF CONTROL FOR YEARS TO COME.
    Mind you ...we are very good at TALKING...pity its not a power source.

 

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