Renewable Energy

Energy and Climate Change written question – answered on 18th November 2010.

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Photo of Philip Davies Philip Davies Conservative, Shipley

To ask the Secretary of State for Energy and Climate Change pursuant to the answer of 2 November 2010, Official Report, column 722W, on renewable energy, what estimate he has made of the change in (a) domestic and (b) commercial electricity bills consequent upon the provision of around 30 per cent. of electricity from renewable sources in 2020.

Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change

Based on our last published estimates in July 2010, we estimate renewables policies will add £105 (26%) to the average annual domestic electricity bill in 2020 and £246,000 (25%) to the average medium-sized annual non-domestic user's electricity bill in 2020 (compared with a bill in the same year in the absence of these policies, but including other energy and climate change policies). These estimates do not account for the potential offsetting impact from higher levels of renewables reducing wholesale electricity prices, which we estimate could be of the order of £6/MWh on average in the years to 2020.

The above estimates are based on a fossil fuel price scenario consistent with an $80/bbl oil price in 2020. In a world of higher fossil fuel prices ($150/barrel in 2020) the impact of renewables policies would be to increase domestic electricity bills by only £70 (13%) and add just £163,000 (12%) to the average electricity bill of medium-sized non-domestic users in 2020.

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