Press Story

Adopting an ambitious target to clean up the UK's energy system would not add costs to household energy bills, according to new analysis of the UK's energy pathways to 2030 by the think tank IPPR. The calculations show there would be small cost savings but relying on more gas would increase household bills.

IPPR analysis shows that moving to a cleaner energy system in the run up to 2030 would not add to cash-strapped consumers' energy bills. It would in factresult in small savings for theeconomyof£163m if gas prices rise in line with expectations, or £249m if gas prices are higher than expected. However, relying more on gas up to 2030 by building more gas-fired power stations would cost £312m or £478m if gas prices are higher than expected - between £10-15 per household.

IPPR's analysis shows that not only would energy prices be more expensive, but they would be highly volatile. At the Government's upper estimate for gas generation in 2030, energy costs could vary by as much as £229 per household. At the lower estimate, energy costs are only likely to vary by around £51 per household.

The analysis comes ahead of an expected vote in parliament on an amendment tabled by the Conservative MP Tim Yeo and Labour MP Barry Gardiner, which calls for the Government to set a 'decarbonisation target' for the power sector in 2030, following the advice of the government's independent advisers, the Committee on Climate Change. The vote is set to test the Coalition as the Liberal Democrats have previously adopted such a target as party policy. However as a result of Coalition negotiations Secretary of State for Energy and Climate Change Ed Davey has delayed setting a target until after the next election.

Will Straw, IPPR Associate Director, said:

"A target to decarbonise the power sector by 2030 is essential to free consumers from the tyranny of volatile gas prices, provide certainty for investors looking to upgrade our energy system, and pave the way for the electrification of the transport sector.

"All MPs who have previously supported a target of this nature must support Tim Yeo and Barry Gardiner's amendment when it is debated in the House of Commons."

Notes to editors:

IPPR's new presentation illustrating the choices for government in considering whether to set a clean energy target for the power sector is available from:http://www.slideshare.net/ippr/target-2030-presentation-22-feb13

All calculations are based on data published by the Department for Energy and Climate Change and the Committee on Climate Change.

Contacts

Richard Darlington, 07525 481 602, r.darlington@ippr.org