Energy bills are expected to soar by 70 per cent to £2,200 a year by 2020, according to research by investment bank Liberum Capital.
Analysts say prices will rocket as more coal-fired power stations are taken out of service because of tough anti-pollution measures.
According Liberum’s Dominic Nash, 40 per cent of our energy is now generated by coal-fired plants, but by 2015 about half of the plants will have closed with the remainder restricting their hours of energy output.
Prices will have to rise by more than seven per cent a year, he said, either to encourage old plants to stay open and install more environmentally friendly procedures, or to pay for new gas-powered stations.
The number of households in fuel poverty – those paying more than ten per cent of their income for energy – is expected to rise from five million to more than eight million in the next four years alone.
Earlier this month a report warned that the rush to green energy by spending billions on wind turbines would be an expensive blunder.
Professor Gordon Hughes of Edinburgh University said the massive programme will cost consumers £120billion by 2020 through higher bills.
This was almost ten times more than the £13billion it would cost to generate the same amount of electricity from efficient gas-fired power stations, according to the leading energy and environment economist.
Supporters of wind power insist the key benefit is that it allows a huge reduction in CO2 emissions, in line with EU obligations. This was challenged in the study, which suggests the switch to wind will actually deliver only a tiny reduction.
The report is published by the Global Warming Policy Foundation, a think-tank devoted to challenging conventional wisdom about climate change. GWPF’s chairman is the former Tory Chancellor Lord Lawson.
Professor Hughes said families are being forced to subsidise wind farms through their bills.
Meanwhile business energy costs are also being driven up, so harming their profits and ability to invest and grow.
By contrast around a dozen landowners who allow wind farms to be erected on their property are to share an £850million subsidy windfall.
A wind turbine generating £150,000 of electricity a year is eligible for ‘monstrous subsidies’ of £250,000 a year.
Professor Hughes warned: ‘Unless the Government scales back its commitments to wind power very substantially, its policy will be worse than a mistake, it will be a blunder.’
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