Plans for a massive expansion of renewable energy will cost families an average of £400 a year each, a report warned last night.
It accuses Energy Secretary Chris Huhne of ‘misleading’ the public by suggesting energy costs could be lower as a result of the Government’s drive for green power.
It said official estimates had grossly underestimated the impact on families by leaving out much of the huge taxpayer subsidy for wind farms and other costly forms of renewable energy.
Mr Huhne told MPs in November that the Government’s green energy policies would reduce average household bills by 7 per cent – equal to about £94 a year.
Businesses will see average bills rise by 19 per cent. Government officials last night said ministers stood by the estimate.
But the study by the respected think-tank Policy Exchange says the Government’s figures are based on huge assumptions that households will cut their energy use. It suggests the overall impact of subsidies for green energy will cost the average family £400 a year by 2020 – the equivalent of adding 2.5p to the VAT rate.
The huge cost will raise fresh questions about the Government’s strategy of focusing resources on an expensive network of offshore wind farms in an effort to meet tough EU carbon emission targets.
Simon Less, of Policy Exchange, called on ministers to be ‘more transparent’.
The think-tank, which has close links to the Conservative Party, believes the Government’s green targets should be ‘renegotiated’ with Brussels, and that the private sector should be given incentives to come up with cheaper ways of cutting carbon emissions.
A spokesman for the Department of Energy and Climate Change said £400 was ‘not a credible figure, and appears to be based on flawed analysis’.
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