05/09/2011 05:06 BST | Updated 04/11/2011 05:12 GMT

Green Energy Policies Could Add £300 A Year To Household Bills

PRESS ASSOCIATION --Green energy policies are set to add more than £300 a year to the average household fuel bill, according to Downing Street calculations.

David Cameron has been warned that there will be a 30% rise in consumer energy bills by 2020 as a direct result of the coalition's policies.

In a note seen by The Daily Telegraph, the Prime Minister's senior policy adviser Ben Moxham also doubts Energy Secretary Chris Huhne's claims that price increases would be offset by lower consumption due to energy efficiency measures. That, he says, is "unconvincing".

The projected rise of 30% in the average household energy bill of £1,059 by 2020 is blamed on policies like carbon pricing, designed to promote the use of renewables and nuclear power sources.

New obligations on energy firms to provide extra support with energy efficiency to low income homes, and to increasingly use electricity from renewable sources, are also major factors.

"Over time it is clear that the impact of our policies on consumer bills will become significantly greater," Mr Moxham states.

He adds: "DECC's (Department of Energy and Climate Change) mid-case gas price scenario sees policies adding 30% to consumer energy bills by 2020 compared to a world without policies. "

The note is dated July 29 2011 and is copied in to senior Downing Street advisers including Mr Cameron's chief of staff Ed Llewellyn, permanent secretary Jeremy Heywood and policy chief Steve Hilton.

A spokesman for the Department for Energy and Climate Change said: "Reforms will not add £300 to bills. Our policies will both add and subtract from future bills because we need to build new reliable energy sources to keep the lights on, but we'll also be helping people to cut their bills through greater energy efficiency.

"Our reforms to the electricity market will deliver the best deal for Britain and for consumers: getting us off the hook of relying on imported oil and gas by creating a greener, cleaner and ultimately cheaper mix of electricity sources right here in the UK."

Meg Hillier, Labour's Shadow Energy Secretary, described the Government's policy as "a shambles".

"This high-level leak reveals incompetence at the heart of the Government over energy prices and climate change.

"The Prime Minister's advisers are knifing Chris Huhne's policies. All the while, people's energy bills are set to soar this winter, making life harder for families whose living standards are being squeezed, while ministers sit on their hands. It's a shambles."