Energy bills will rise by more than £200 over the rest of this decade, driven by costs of government green policies, unless consumers use less gas and electricity, supplier npower has warned.
A typical dual fuel bill will increase from £1,123 in 2013 to £1,330 by 2020, although this could be pegged back to £1,240 if customers take out energy efficiency measures to insulate draughty homes, it said in a report on Wednesday.
Paul Massara, npower chief executive, said: “The actual unit price of energy in the UK is one of the lowest in Europe but bills are high because British houses waste so much energy.
“If we can increase the efficiency of the UK’s old and draughty housing, we can ensure that annual energy bills are some of the lowest too.”
The supplier forecast that commodity costs of electricity and gas would actually fall, from £487 to £465, but that this would be more than offset by increases in other kinds of charges paid for on energy bills.
Taxes and levies to fund government energy policy, such as new wind farms, would increase by £136, while regulated energy network costs would rise by £58, it said.
The costs of installing new smart meters would add £25 to bills while suppliers would increase their profit by £10, it said.
The forecast of rising green policy costs is likely to fuel the debate over the cost of going green, coming in the wake of the Prime Minister’s pledge to “roll back” green levies on energy bills.
Regulator Ofgem disputed the figures over energy network costs, calling npower’s “incorrect and misleading” and saying they would in fact be broadly flat this decade.
The conclusion of a growing disparity between the cost of energy and retail bills echoes the expected findings of an EU report into energy pricing, expected to be published on Wednesday.
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