Household energy bills – impacts of meeting carbon budgets

Mike Thompson, Committee on Climate Change

The Climate Change Act requires the CCC to consider the impact of carbon budgets on energy supplies and fuel poverty. Fuel poverty has risen from 2004 to 2010. The CCC focus on assessing costs for dual fuel customers however the total cost of carbon budgets, fiscal impact, competitiveness impacts and technology development are also assessed. Recent increases in bills from 2004 to 2010 (£455) were primarily due to factors unrelated to climate policy (which contributed £75). The CCC expects carbon policies to add around £110 to the average dual-fuel bill by 2020, mainly due to support for investments in low carbon power generation. The CCC identify significant potential for energy efficiency to reduce bills, however, these are currently uncertain and require effective policies. If unlocked they would offset carbon policy costs. Households with electric heating could be disproportionately affected by low-carbon costs.