Government to test cost of green energy policies amid rising bills

The government is to “stress test” green energy policies after two of the big six energy providers announced an increase in their prices.

The policies are designed to improve insulation in homes, tackle fuel poverty and boost green infrastructure investment.

Speaking to the Financial Times, deputy prime minister Nick Clegg said, “It would be irrational not to look at these policies, to stress test them.”

He said the government should ensure the levies are “value for money” and use competition to improve energy rates.

Clegg added, “People won’t thank us if – in a few years’ time – the lights go out or there are more people in fuel poverty and there are fewer homes that have been properly insulated.”

The comments follow price hikes from British Gas and SSE.

British Gas blamed rising gas prices on the global market, the cost of delivering gas and the government’s social and environmental schemes for the increase.

However, left-leaning thinktank the IPPR said the increase was due to poor delivery on government policy, adding that a third of the increase could have been avoided.

Reg Platt, senior research fellow at the IPPR, said, “A third of [the] tariff increase, or £35 a year, could have been avoided if British Gas delivered the government’s energy efficiency policies as cost effectively as SSE.

“What’s more, SSE and British Gas are both under investigation by the energy markets regulator Ofgem for failing to deliver the government’s energy efficiency polices effectively in the past. The amount other companies are spending on government policies is likely to be lower.”

Further reading:

British Gas announce energy bills hike 

SSE energy prices to increase by 8.2% in November

Ed Miliband’s pledge to freeze energy costs spark intense debate

Customers switching energy providers at record low 

Social economy bodies ask political leaders for ‘21^st century’ energy debate