Renewable energy to cost customers 5% more

Green electricty may save the environment but at a cost to consumers who, in order to help the government meet renewable energy targets, will face an increase of around 5% in electricity bills by 2010.

A National Audit Office (NAO) report found that the government was on course to meet a 10% target for electricity generated from renewable sources by 2010, however, the report warned that it could cost taxpayers more than £1 billion-a-year by the end of the decade.

In order to tackle the problem of climate change, the government is aiming to reduce CO2 emissions by around 60% by 2050. A number of policies, including renewable energy, are being implemented in order to achieve this. The Department of Trade and Industry (DTI) has developed a package of policies aimed at developing different types of renewable energy. The main policy is the Renewables Obligation, which encourages greater electricity production from renewable sources, by increasing the income renewable generators receive, above and beyond the market price of electricity. However, the NAO found that two years after Renewables Obligation was introduced, the level of electricity supplied from eligible renewable sources was only 2.4%, against a quota of 4.3%.

The DTI has also made capital grants available to support offshore wind farms and bioenergy power stations, as well as also providing research and development grants for those technologies, which are not yet commercially viable, such as wave and tidal schemes.

Friends of the Earth welcomed the NAO report, but said that more needed to be done to tackle the problem of climate change.

The organisation's climate campaginer, Neil Crumpton, said: "We are encouraged that the UK appears to be on course to meet its renewable energy target. But the government is still not doing enough to combat climate change. Carbon dioxide levels have not fallen since Labour came to power. Mr Blair has pledged to put global warming at the top of the international agenda this year. The Prime Minister must lead by example and introduce policies to ensure year-on-year cuts in UK carbon dioxide levels."

The Labour government has promised to reduce UK carbon dioxide emissions by up to 20%.


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