By BEN WOODS, Energy writer
Friday, November 30, 2012
Energy secretary Ed Davey yesterday unveiled plans for a major shake-up of the energy market to cut emissions, drive growth and keep the lights on. But who will foot the bill – and what opportunities will it present for Norfolk businesses? Energy Writer Ben Woods investigates.
Campaigners warned that the government could be forcing some people to make the choice between “eating or heating” if they increase energy bills to meet the demands for greener energy.
It comes as the government will look to add less than £100 a year to consumer’s energy bills in a bid to encourage investment in low-carbon energy that could reduce fuel bills in the future.
Lin Mathews, manager for information and advice at Age UK Norfolk, criticised the government for targeting consumers and raised concerns about the ability of poorer people to pay.
She has used the opportunity to urge people to support the EDP’s Surviving Winter that helps elderly and vulnerable people cope with their fuel bills.
She said: “We thought the money would come from industry, but it looks like once again people on fixed incomes who will have to find the extra money.
“It comes back to the case for some people that they will either have to eat or heat.
“People are already hard pushed with the bills they are facing at the moment and pay does not go as far as it used to.
“Once again it will be the job of charities like ours that will have to pick up result of this.”
Meanwhile, Audrey Gallacher, director of energy at Consumer Focus, said the government must be clear about how it would control costs.
She said: “Customers recognise that making our energy supply greener and more secure will come at a cost.
“But given the huge sums involved and the extra costs consumers will bear, people need guarantees that they are getting value for money.”
Meanwhile, householders in Norwich are being urged to slash the cost of their energy bills now by taking advantage of the Big Switch and Save Scheme, which could help save up to £156 a year on their bill.
More than 1,500 households have signed up for Norwich City Council’s switching scheme, which was launched in October with the aim of encouraging households to sign up and use people power to negotiate a better deal on their fuel bills for the next year.
The registration closed at midnight on November 25, with two energy suppliers winning the contract:
Ovo Energy will be supplying energy to online billing only customers, with dual fuel customers in this category saving on average £176 a year and electricity only customers will save on average £165 a year.
Co-operative Energy will be offering to supply to paper billing customers. Dual fuel customers in this category saving on average £156 a year and electricity only customers will save on average £182 a year.
Richard Wilson, the city council’s environmental strategy manager, said the result was fantastic.
Energy secretary Ed Davey hailed the Energy Bill as a “once-in-a-generation transformation” of the electricity market yesterday – promising to slash carbon emissions, create jobs and keep electricity flowing to our homes.
But the announcement met with mixed views across the region, as business leaders welcomed the prospect of a jobs bonanza for Norfolk and Suffolk’s energy industries, while campaigners expressed concerns for how the poorest would cope if consumers had to foot the bill.
Mr Davey revealed that the bill would pave the way for ministers to treble the investment in renewable energy and low-carbon power to £7.6bn by 2020.
He told the House of Commons that it was designed to drive down bills by preventing the UK from being at the mercy of fluctuating global fossil fuel prices by increasing the amount of power generated through renewable and nuclear energy.
But the support for low-carbon energy would add less than £100 a year to people’s fuel bills, he revealed.
Addressing the house, Mr Davey said: “The Energy Bill will attract investment to bring about a once-in-a-generation transformation of our electricity market, moving from predominantly a fossil-fuel to a diverse low-carbon generation mix.
“This is the culmination of two years’ work in designing a new market-based approach that will deliver certainty for investors and fairness for consumers.
“The challenge is big. Over the next decade, the investment needed to upgrade our energy infrastructure is almost half of the infrastructure investment needed in the UK. This is far more than is taking place in transport, in telecoms, or in water, and dwarfs the investment that was needed for the Olympics or Crossrail. The Bill will support the construction of a diverse mix of renewables, new nuclear, gas and CCS, protecting our economy from energy shortfalls and significantly decarbonising our electricity supply by the 2030s as part of global efforts to tackle climate change.”
It is estimated that £110bn will be needed to revitalise the UK’s ageing electricity infrastructure, with low carbon powers such as wind farms being mooted as the best way to plug the gap.
To achieve this, the government plans to unroll long-term contracts for energy companies, which will ensure they are paid a higher price for the electricity they generate from low-carbon sources than those generated through fossil fuels.
Once in place, the government estimates that household energy bills should be between 5pc and 9pc lower than they would be otherwise between 2016 and 2030.
Business leader across Norfolk and Suffolk believe the bill will give the big energy companies confidence to invest in the region – with the hope of creating thousands of jobs for companies in Great Yarmouth and Lowestoft. Chris Starkie, programme director at New Anglia Local Enterprise Partnership, said: “Renewable energy is the biggest opportunity that some of our businesses have for the future, but what has been holding them back is a lack of clarity about its role in the government’s plans.
“I am pleased the Energy Bill has been published. It may not have everything that everyone wants, but it will provide clarity for companies who want to bring forward investment projects.
“That investment could bring thousands of jobs to Norfolk and Suffolk and the supply chain, nuclear power and anaerobic digestion.”
But fears have been raised by campaigners that forcing the consumer to pay for the new low-carbon electricity market would punish the poorest who are already struggling to cope with high energy bills.
However, Simon Wright MP for Norwich South, said the bill would include measures to ensure consumers are on the lowest tariff.
He said: “I am very concerned about older people and their energy and I have raised it in the House of Commons before to make sure support is there so they can switch onto the cheapest energy tariff. By simplifying the billing structures, that will benefit elderly who are worrying about their incomes. But we need to address the problems of the older energy markets to make sure we are generating our own energy, which is good for the environment and that we can rely on.”
The Bill will now begin its passage through the Houses of Parliament.