* Bills headed for 18 percent rise by 2020
* Government says policies will trim 11 percent from
potential 2020 bills
(Adds analyst comment)
By Susanna Twidale
LONDON, March 27 Britain's government said
household energy bills were headed for an 18 percent increase by
2020 but its policies promoting domestic energy efficiency,
including its so-called Green Deal, would make the rise
The average British household could face an energy bill of
1,496 pounds ($2,300) per year by 2020, according to a report
published by the Department of Energy and Climate Change (DECC)
on Wednesday, up from the 1,267 pounds it expects homes to pay
If government schemes such as the Green Deal, which helps
pay for energy saving home improvements, are successful, the
average 2020 bill will be 11 percent cheaper than this forecast,
the report said.
"With policies, bills are still going to go up, but they are
going to go up by a lot less," energy and climate change
secretary Ed Davey said at a briefing for journalists ahead of
the report's publication.
The Green Deal is one of several government policies now in
place that include plans to roll out smart meters - indicating
which appliances use most power - replace inefficient boilers
and encourage energy suppliers to help pay for roof insulations.
Overall these measures will knock 452 pounds from the
average bill in 2020, DECC said, although this saving will be
reduced to 166 pounds by the cost of other government schemes to
boost renewable generation and levies on carbon emissions.
Some analysts doubted the government figures, saying DECC's
reduction figures were hard to measure and that installation
costs for energy efficiency measures had not been included.
"The reductions are virtually all down to energy efficiency
measures, the impact of which are not certain, whereas the
increases are pretty much guaranteed, and these calculations do
not include the cost to the consumer of installing the energy
efficiency measures," Liberum Capital said in a research note.
"The concern is that when bills really start to ramp up,
future governments will renege on the returns promised to
developers. This is exactly what happened in Spain, Italy," the
investment bank said.
Britain's government came under criticism last year when
each of the country's big six energy providers ramped up bills
by up to 10 percent, blaming soaring wholesale gas prices.
British wholesale gas prices surged to a record high last
Friday after one of its main gas import pipelines shut down
unexpectedly. Davey said companies would not be able to use this
as an excuse to increase the cost for households.
"We will make it clear to energy suppliers that this is just
a cold, temporary snap and is no excuse for putting up energy
bills," he said.
($1 = 0.6599 British pounds)
(Additional reporting by Henning Gloystein; Editing by Anthony