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Saturday 17 February 2018
17 February 2018 - NEWS UPDATE
Renewable Energy

Energy Bill will cost households less than £100 a year, says Davey

Ed Davey has denied the Energy Bill will cause the cost of power to soar, but add less than £100 to the average household bill. The Energy Secretary said energy saving measures and initiatives such as the Green Deal would lead to considerably lower bills in 2020 than they otherwise would have been.

The legislation - which is introduced in Parliament today - will enable ministers to invest £7.6 billion in green power generation in 2020, up from £2.35 billion this year.

An estimated £110 billion is needed in the next decade to renew the UK's ageing electricity infrastructure; much of the new investment will be made in low-carbon power sources such as wind farms and marine renewables.

Speaking on a visit to the National Grid's Electricity National Control Centre in Berkshire, Mr Davey said: "We want to make sure all this investment can come through in the least costly way so people's bills aren't put up by huge amounts and we think this Energy Bill will deliver on that.

"We believe we can get secure energy, green energy, at a price that is affordable.

"If you look at all our energy policies together with energy efficiency for example and our reforms to tariffs, we believe that people's bills will be lower in 2020 than they otherwise would have been because of the way we're helping people save energy."

He went on: "There's a real challenge in this decade because we're going to see lots of power stations coming to the end of their life.

"Coal power stations are closing down and nuclear power stations are closing down, so we've got to have a lot more new generation capacity coming on.

"Nearly 20% needs to be replaced so we need to make sure the electricity market provides the incentives for people to invest."

But environmentalists say the Bill does not go far enough, because it does not include a target to slash carbon emissions from the power sector by 2030 - although it does include the power to set a target in 2016 if it is considered necessary.

The Energy Bill has been the subject of political wrangling within the Coalition, with Mr Davey voicing support for long-term limits on carbon emissions by the power sector and Chancellor George Osborne backing a second "dash for gas" with support for new gas power plants as a cheap source of electricity and tax relief for unconventional shale gas exploration in the UK.

But agreement has now been reached on a series of contentious issues.

"I'm particularly focusing on green energy," Mr Davey said. "What we announced, with the deal with the Chancellor and I coming together with a whole set of proposals including the Energy Bill, will see the biggest increase in green energy this country has ever seen.

"It's going to be a massive boost to renewables, a massive boost to low carbon. We need that to make sure we can tackle the challenge of climate change."

Labour has condemned the Bill's failure to set a limit for the amount of carbon dioxide that can be emitted per megawatt hour of power from the electricity sector by 2030.

Although there is no 2030 target, the inclusion of a power to establish one in 2016, when the Government's advisers on climate change are set to recommend how much carbon emissions should be cut by 2030 across the economy, is being claimed as a victory for Mr Davey.

The Government believes the spending level agreed for low-carbon power subsidies will allow the UK to meet goals to supply 30% of electricity from renewables by 2020 and also fund other low-carbon technology including nuclear and fossil fuel power plants where emissions are captured and stored.

Meanwhile, proposals to dramatically reduce electricity demand across the whole UK economy will be published by the Government today.

Cutting the amount of electricity used in Britain's homes, businesses and industry can be much cheaper than paying firms to supply it; saving money through lower bills and reducing the need for new generation capacity, Ministers say.

Just a 10 per cent reduction in electricity demand could produce savings of around £4 billion in 2030, which would more than compensate for the cost of making efficiency investments upfront.

A 10 per cent reduction in demand would also cut 4.5 megatonnes of carbon, equivalent to that produced by one large city in a year, and save an amount of electricity comparable to that generated by five power stations in a year.

Leading the way on efficiency also makes good business sense, helping to put the UK at the forefront of the growing global market for energy efficiency goods and services and driving growth in green jobs, the Energy Secretary said.

The Department of Energy and Climate Change (DECC) is seeking views on a number of key proposals to reduce electricity demand across the whole UK economy.

These include payments for each kWh saved through energy saving measures installed such as energy efficient lighting, incentives to replace older, less efficient technologies with new more efficient equipment such as lighting, pumps and motors, specifically targeted at different sectors, and clearer energy efficiency information to reduce demand, including an energy efficiency information 'hub' for the industrial sector as well as better labeling on products.

Taking current and planned schemes into account, analysis undertaken with the support of McKinsey & Co has identified around 92TWh of potential electricity savings in 2030, equivalent to around 26 per cent of total demand. A saving of 10TWh is equivalent to the electricity generated by a power station in a year.

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