Energy reforms set to increase household bills

Changes to the electricity market, set out in a draft Energy Bill, are set to send consumerís utility bills soaring.

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Proposals set out in the government Bill will see an increasing reliance on nuclear power, as well as an ongoing bid to cut carbon emissions.

The reforms aim to generate a cash injection of £110 billion ñ more than twice the current rate of investment ñ and will be used to fund the development of the grid, power plants and wind farms in an effort to close the gap in the UKís energy needs.

The changes are set to push average household energy bills up by £160 by 2030, though the Department of Energy and Climate Change (DECCC) argues that this is under the forecasted figure of £200 if the changes donít take place.

The news comes as energy giant EDF has announced it is in talks with a regulator about extending the life of its existing nuclear power stations. However, two of the ìBig Sixî energy firms have recently pulled out of building two new reactors, dampening the governmentís mission to create a ìnuclear renaissanceî.

Earlier this year, energy providers RWE npower and E.ON announced that they would be halting plans to develop nuclear power plants, arguing that it would weaken UK energy policy.

A new long-term contract for energy providers was also outlined in the draft Energy Bill, which would offset the high outlay for building offshore wind farms and nuclear power plants, by using the long-term income generated from new low-carbon generators.

This idea has been criticised by MPs, who argue that is tantamount to subsidising new nuclear reactors ñ going against the governmentís original pledge.

You can compare gas and electricity prices with Money Expert.


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