POLITICS
16/07/2013 10:36 BST | Updated 16/07/2013 13:08 BST

Green Energy Policies Are Increasing Energy Bills Says npower CEO Paul Massara

An Npower electricity bill as the energy supplier is set to provide details of its tariff rises today after signalling that it would hike standard prices.
PA
An Npower electricity bill as the energy supplier is set to provide details of its tariff rises today after signalling that it would hike standard prices.

Households will have to pay £240 a year more by 2020 in their energy bills due to the added costs from government green policies, according to the boss of energy supplier RWE npower

Paul Massara, npower chief executive, blamed the greater costs of green energy and efficiency programmes for pushing up bills, which could rise to £1,487 by the end of the decade.

"Government policy is rightly delivering the transformation we need to address the UK's poor housing stock and encourage investment required in new infrastructure – but achieving these aspirations comes at a cost, and this is what needs to be clearly communicated to consumers,” Massara said.

"The fact is that if people don't take action to reduce energy consumption, their bills are going to rise. If we can't be upfront about that we won't be able to convince people to make big changes to be more energy efficient."

The energy supplier said low-carbon technology support would itself add £82 to the average energy bill by 2020.

Other energy providers from the “big six” in the UK have declined to comment.

However, Tory sceptics leapt on the news as proof of the “code of silence” in the government’s “green establishment”.

Former Tory cabinet minister Peter Lilley, who serves on the Commons Energy and Climate Change Committee, told the Huffington Post UK that Massara was “absolutely correct".

“The green establishment in government and the media have adopted an omerta – a code of silence - about the true cost of replacing fossil fuels. In fact the cost to households will be three times as high as Mr Massara suggests since he is only citing the costs which directly enter household energy bills: yet Ed Davey recently admitted that two thirds of the costs of switching to renewables fall on industry’s energy bills – which ultimately are born by households in higher prices, lower earnings or reduced pensions,” he said.

"Ordinary people cannot escape those costs by insulating their homes or turning down the thermostat.”

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In response to Massara’s comments, Greg Barker, the Tory minister for energy and climate change, said: "Global gas prices, not green policies, have been primarily pushing up energy bills. That is why it is vital we crack on with securing investment in a diverse energy mix that includes renewables and new nuclear, as well as gas.

"We must also continue to drive up the energy efficiency of the nation's housing stock, particularly the homes of the most vulnerable households."

Green energy providers hit back and blamed rising gas prices for putting up energy bills.

Speaking to the Huffington Post UK, Ecotricity CEO Dale Vince said: “Soaring bills and fuel poverty will only get worse if we don’t continue to invest in renewable energy. The government’s own Committee on Climate Change stated back in December that household energy bills will be about £600 higher per year in the coming decades if the UK relies increasingly on gas. And Greg Barker is absolutely right when he talks about global gas prices being the principal cause of recent energy bill hikes.

Green Party leader Natalie Bennett said: "The nPower report has been rightly criticised for failing to acknowledge the impact of energy efficiency measures, and changes in consumer behaviour with the squeeze on households coming from high rents and house prices, transport costs and food prices.

"It also ignores the fact that we have no alternative but the build a low-carbon economy, and that in doing that we can see very significant economic benefits, from creating jobs in engineering, in manufacturing, and energy conservation."