Low-carbon policies to push up business energy bills

Supporting low-carbon electricity and the transition to renewables could increase business energy bills by 45% between 2013-30, research by the Committee on Climate Change has found.
In its third report on the impact of carbon budgets on energy bills, published in December 2014, the committee said that between 2004-13 energy bills for commercial users had increased by around 135%-155%. This, according to the report, largely reflects increases in wholesale costs. But between 15%-35% of the rise could, the report said, be attributed to low-carbon policies, such as the UK carbon price, renewables subsidies and the Climate Change Levy.
The committee said it expected this trend to continue. It claimed that commercial users could, as a consequence of low-carbon policies, see their final delivered energy bills rise by between 10%-15% from 2013-20, and a further 30%-45% to 2030. Overall, the report anticipated that low-carbon policies would add a further 1.8p/kWh to the electricity price by the end of the decade. This would, alongside wholesale price changes and network costs, contribute to a real terms electricity price increase from 10.1p/kWh to 10.5p/kWh. By 2030, the electricity price for commercial users was expected to reach 13.4p/kWh.
To mitigate cost increases the committee recommended that businesses increase their energy efficiency. By doing this the report estimated that businesses could cut their power and gas bills by around 10%.