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In the UK, business leaders - concerned that they will be
asked to foot the bill for the UK government's new £100bn
renewable energy strategy in the form of higher fuel bills
- could soon have access to a raft of new incentives and services
designed to help them reduce their energy costs.
The UK government has revealed it is preparing a major consultation
on energy efficiency policies to be released in the autumn,
which is expected to include a range of new incentives and
support services for both businesses and households.
Speaking at the launch of the UK government's consultation
on its renewable energy strategy (Click
Here), Prime Minister Gordon Brown said the consultation
would include proposals for "a new suppliers obligation,
aimed at changing the way in which energy companies operate,
encouraging them not to supply ever more units of electricity
and gas, but to make profits from reducing - and not just
increasing - demand."
A spokesman for the department of Business, Enterprise and
Regulatory Reform (BERR), said that, as well as encouraging
energy companies to help customers reduce energy use, the
consultation was also likely to incorporate plans for an extension
of incentives on energy saving technologies, wider use of
smart grid technologies and new forms of metering designed
to help firms cut energy use. He also argued that reports
that the renewable energy strategy will lead to huge rises
in energy bills were guilty of lack of "balance".
The UK government's consultation document admitted that the
increased subsidies required to drive investment in renewable
energy, would result in an increase in domestic electricity
bills of between 10 to 13 per cent and a rise in gas bills
of 18 to 37 per cent by 2020. The projections for business
customers are worse still with the report claiming electricity
bills will climb by between 11 and 15 per cent and gas bills
will rise by between 24 and 49 per cent.
The strategy prompted criticism from employers' association,
CBI, which argued that such a huge increase in renewable energy
capacity did not represent a cost-effective means of cutting
carbon emissions.
However, a spokesman for BERR said that many of the media
reports on the cost of the new strategy had failed to note
that the projected increases in fuel bills represented a "worst
case scenario".
"The figures are based on a scenario where oil costs
$70 a barrel in 2020" - he said. "If oil prices
remain high, the impact of the renewables strategy on energy
prices could be half that projected."
He added that the bulk of any increase in prices was also
unlikely to take effect until 2015 and that, in the longer-term,
the strategy should result in lower energy bills. "When
you look post-2020 - when we will have a higher price on carbon
- then the increased use of renewables will mean that prices
will be lower than they would otherwise have been" -
he explained.
Dr Mark Williamson, director of innovations at the Carbon
Trust, said that the increases in prices were likely to prove
"tolerable" and would help stimulate further investment
in energy efficiency measures.
"In fairness to the government, it makes the point in
the report that energy efficiency is still the vital first
step to meeting renewables targets" - he said. "If
you can reduce the energy you use, it makes it far easier
for the EU's renewables targets to be met."
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