Comment on increasing household energy bills

Posted on 1 Aug 2017 in

Responding to speculation today about the cost of energy, Bob Ward, policy and communications director at the ESRC Centre for Climate Change Economics and Policy and the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science, said:

“Support for renewables and energy efficiency measures represents less than 10 per cent of annual household dual fuel bills so cannot be blamed fully for the increase in energy prices. In addition, the UK has a relatively low carbon price that seeks to correct the market failure that effectively provides a huge implicit subsidy for fossil fuels of many billions of pounds every year, according to researchers at the International Monetary Fund. This subsidy arises because the prices of fossil fuels do not reflect the costs they impose on others through the impacts of climate change. It is true that the UK needs to upgrade and modernise its electricity transmission network to take advantage of distributed sources of clean energy such as solar and wind. However, it should be remembered that the public also contributed to the costs of establishing the existing transmission network, which was designed primarily for fossil fuels. The best long-term strategy for managing the cost of energy for consumers is by reducing energy waste. That means much greater investment in a range of measures, such as better insulation for houses and smart meters. Cutting energy waste should be the focus for everyone who has a genuine interest in limiting the cost of energy for consumers.”

For more information about this media release, please contact Victoria Druce on +44 (0) 20 7107 5865 or v.druce@lse.ac.uk or Bob Ward on +44 (0) 7811 320346 or r.e.ward@lse.ac.uk  

NOTES FOR EDITORS

  1. The ESRC Centre for Climate Change Economics and Policy (https://www.cccep.ac.uk/) is hosted by the University of Leeds and the London School of Economics and Political Science. It is funded by the UK Economic and Social Research Council (http://www.esrc.ac.uk/). The Centre’s mission is to advance public and private action on climate change through rigorous, innovative research.
  2. The Grantham Research Institute on Climate Change and the Environment (http://www.lse.ac.uk/grantham) was launched at the London School of Economics and Political Science in October 2008. It is funded by The Grantham Foundation for the Protection of the Environment (http://www.granthamfoundation.org/).