Household energy bills will be £240 higher each year by 2020 largely due to the mounting cost of Government green policies, energy giant Npower claims.

The big six provider says energy company profits are not to blame for rising bills, adding consumers should know the true cost of Government investment in efficiency schemes and greener forms of energy production. It says these will be the main driver behind a hike in bills from £1,247 today to £1,487 by the end of the decade.

Npower says support for low-carbon technologies alone would add £82 to the average energy bill by the end of the decade, up from £34 this year, and £12 in 2007.

It adds the cost of investing in low-carbon power sources accounts for less than 3% of the average household bill, but this will rise to 5.5% by the end of this decade.

Paul Massara, Npower's chief executive, says: "Government policy is rightly delivering the transformation we need to address the UK's poor housing stock and encourage investment required in new infrastructure – but achieving these aspirations comes at a cost, and this is what needs to be clearly communicated to consumers."

Energy profits have risen from £18 on the average dual fuel bill in 2007 to £59 this year. Npower predicts profits will rise to £71 in 2020, staying constant at around 5% of the bill.

Green policies 'keeping bills lower'

Martin Lewis
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But the Government says its policies are keeping bills lower. It adds a typical household is saving £65 today and will save £166 by 2020, compared with what would happen if the UK remained reliant on fossil fuels, failed to tackle climate change and did not make homes more efficient.

Energy Minister Greg Barker says: "Global gas prices, not green policies, have been primarily pushing up energy bills. That is why it is vital we crack on with securing investment in a diverse energy mix that includes renewables and new nuclear, as well as gas.

"We must also continue to drive up the energy efficiency of the nation's housing stock, particularly the homes of the most vulnerable households."

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