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 705.

    704.BLACK_PEARL
    Just now
    684.Serk
    16th July 2013 - 21:17
    Pure Greed and Oppression!
    ****
    Sums up EU energy policies nicely


    >>>

    This in not really the place for an EU bashing, even though it can be warranted sometimes, please read my last few posts, this whole issue involves, 197 countries, not just the 28 in the EU.

    Thank you.

  • rate this
    0

    Comment number 704.

    684.Serk
    16th July 2013 - 21:17
    Pure Greed and Oppression!
    ****
    Sums up EU energy policies nicely

  • rate this
    -1

    Comment number 703.

    Lack of investment in planning for the future in 'solid' power generation by Govt. (Not the 'cant knock the skin of a rice pudding' type)

    2008 climate change act with associated carbon targets has been an idiotic disaster for the UK adding 20% to energy bills to pass onto rich land owners for the waste of space praye wheels.

    And whats worst is the mis leading of the population on CO2

  • rate this
    0

    Comment number 702.

    @700 Myself

    Correction to my last post and sorry, the following;

    ....America partied for 10 years, with shows like 90210, making people in the US....

    Should or read;

    America partied for 10 years, with shows like 90210, making people in the US, believe that the world was theirs for the taking, aka living way beyond your means, we did it to, stupid yes, but this has to stop now.

  • rate this
    0

    Comment number 701.

    Oh peachy, here we go again. It's like being forced to go for a never ending expensive ride on the Recession Roller Coaster that you can't get off when the Tory Circus is in Town. The Labour Circus definitely isn't an option either, it reminds me of Spike Milligans Q9 Show where he kept saying: "What are we going to do now?.

  • rate this
    0

    Comment number 700.

    @698 Myself

    To all the my American friends out there including my dads family, the reality is this, the whole of the West not just the US won the Cold war, yet come the end of it, it was all USA, USA, USA and America partied for 10 years, with shows like 90210, making people in the US, THEN you ran out of cash and for 13 years paid by credit, the petrodollar must come to an end you need a diet.

  • rate this
    0

    Comment number 699.

    The government wants to hide the truth about the absurd subsidies given to wind farm developers. We all pay through the nose for this vastly expensive and inefficient method of generating power. And for what? Nobody has any idea whether reductions in carbon emissions will make any difference to climate change, and anyway UK efforts are irrelevant as China keeps building more coal fired stations.

  • rate this
    0

    Comment number 698.

    The only way forward is to get rid of the petro dollar exchange system, a system set up in the early 70's as a mutually beneficial refinancing of the West with OPEC nations with guarantees that we would protect them from the USSR. At the time of the deal the USSR was winning the cold war finically we need it, the cold war ended 20+ years ago this has to come to an end to encourage lower prices.

  • rate this
    0

    Comment number 697.

    Europe's Energy Portal

    http://www.energy.eu/

    I was expecting "Rip Off" Britain to be the most expensive. But it is nowhere near.

    So where does all this misinformation about high energy prices in the UK come from I wonder?

    BBC HYS at its very best. Stick your fingers in your ears and shout "la la la la la".

  • rate this
    0

    Comment number 696.

    Does this report take into account the benefits or otherwise of the supposed fracking revolution as it is not mentioned in the article. This seems a little surprising taking into account the amount of coverage it has received recently in relation to keeping future energy price rises under control.

  • rate this
    -1

    Comment number 695.

    681. englishvote
    Actually Britain has some of the cheapest electricity in Europe

    But don’t let facts get in the way of a good moan !"

    Oh, look, you've been voted down for stating an accurate fact - strange that...

    UK electricity is considerably cheaper than the other major EU countries (other than France), but still, we're in 'rip off Britain' apparently.

  • rate this
    +2

    Comment number 694.

    Get used to it people, this will continue. Energy prices, food prices, rent, travel... they will all continue to rise.

    That is until the masses start running out of money and can no long feed and house their families. Then things will become different, very very different.

    The scary thing is, we may be a lot closer to that scenario than we all think.

  • rate this
    0

    Comment number 693.

    27. Zoonie

    Will we ever have a Government who understands and cares?

    Oh but we have one...the Tories understand that we care all glorified peasants to be cheated out of any kind of rights or comfort; and they care very much that a limited few ( including them) get most of the money, status and power.

  • rate this
    +2

    Comment number 692.

    688.Total Mass Retain


    It may come as a shock to you but the laws of physics don't care what the majority care or think. The laws of thermodynamics can't be repealed by a majority vote.

    +++

    But they can be very effectively ignored in the understandings of the majority when faced by "experts" on YouTube.

  • rate this
    +2

    Comment number 691.

    Well what do you know, an increase, which we will all complain about, the Gov will remonstrate and the price will go up.......hey ho
    appears the MP's will use this little story to hide their increase...which of course they don't want......lol
    just who is gullible ?????

  • rate this
    -1

    Comment number 690.

    We pay slightly more than other European countries but earn up to 2 or 3 time more than Eastern European countries who pay 30%-40% of their salary on just energy - and its colder. Now thats criminal and wrong.

  • rate this
    +3

    Comment number 689.

    Time to renationalise, kick out the foreign parasites

    I thought i would never say that. But the policing mechanism is so weak I see no other option

  • rate this
    -1

    Comment number 688.

    "AuntieLeft
    Again the majority have to pay for the vocal minority's scaremongering and misinformation"

    It may come as a shock to you but the laws of physics don't care what the majority care or think. The laws of thermodynamics can't be repealed by a majority vote.

  • rate this
    -1

    Comment number 687.

    Price gouging by the energy companies. Given all the excuses for why they keep raising prices annually by ~10%, to suddenly be able to predict future costs will be much higher is to demonstrate they are talking rubbish.

    Thanks to global warming though, I won't need to use heaters as much in the future. ;)

  • rate this
    0

    Comment number 686.

    Oh that's OK, we get plenty of warning to prepare to pay higher energy bill's, thanks for that. About time energy companies pulled their fingers out and started researching better ways to produce gas & electricity that will give value for money. Why do we have to pay for R&D? surely its in the interest of all companies to push harder to find answers that will improve their products.

 

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