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Coalition ‘must not sign a blank cheque’ for wind farms and nuclear

The official watchdog called on the Government to have a “tighter focus on costs” as it pushes through subsidies for companies to build nuclear power, wind farms and other renewable energy.

Under the Energy Bill, households will ultimately have to pay for the massive construction programme through charges on their energy bills.

Official estimates suggest the sum total of the Coalition’s green policies will raise electricity bills by £100 over the next decade.

Adam Scorer, director of policy at Consumer Focus, urged the Coalition to “re-evaluate the costs to energy customers”

“A much more detailed package of measures will be needed from the Government to help consumers meet the rising challenge of energy costs,” he said.

The warning from Consumer Focus comes after MPs on the Energy Committee said the reforms are not the most cost effective way of replacing many Britain’s ageing power plants with new wind farms and nuclear stations.

The group, chaired by Tim Yeo, a senior Conservative MP, said the plans were “unworkable” and could lead to unnecessarily high bills for consumers.

He also accused George Osborne, the Chancellor, of “not being signed up to the green agenda”.

His committee blamed Mr Osborne for blocking plans for the Government to guarantee a fixed price for electricity to make sure energy companies can afford to build costly wind farms and nuclear stations.

Last night, Scottish ministers added their criticism with serious concerns that the reforms will “subsidise nuclear at the expense of renewable energy”.

Fergus Ewing, the Scottish energy minister, argued that wind farm companies could go abroad, rather than investing in Britain.

“As Tim Yeo has said, it is too important for the UK Government to mess up,” he said.

Edward Davey, the Energy Secretary, yesterday defended his Energy Bill, claiming it will bring down bills by seven per cent compared with the alternative of relying on more gas plants.

“Everything we are doing has affordability at its heart,” he said.

The senior Liberal Democrat minister earlier received a boost, after he was reportedly offered a peace deal by Mr Osborne in their major battle over energy policy.

The Chancellor is trying to reduce subsidises by a quarter for onshore wind farms, which are unpopular with Conservative backbenchers.

Mr Davey has strongly fought the proposals amid fears a deep cut in state support could help kill off Britain’s growing wind industry.

It emerged yesterday in a leaked letter that Mr Osborne is prepared to allow the subsidies to be cut by a more modest 10 per cent if Mr Davey agrees not to sign up to “inflexible” green targets in future.

Vince Cable, the Business Secretary, also waded into the debate by arguing that wind farms would ultimately not need any subsidies at all.

“Of course there is an additional element of subsidy, but what we are trying to ensure is that these new technologies are subsidised very quickly so that their costs fall and that subsidy element disappears,” he said.

Dr Cable said the cost of building offshore wind farms would only need to fall by a quarter to make them competitive with traditional forms of power generation.

6:57PM BST 23 Jul 2012