Green Levies Hitting Home As Npower Hike Prices
By Paul Homewood
From the Telegraph:
Npower will hike the standard cost of gas and electricity by almost 10pc from next month, adding £109 to the dual fuel bill of 1.4 million energy customers.
The big six supplier blamed rising cost pressures for the hike, which was branded "shocking" by the company’s former chief executive Paul Massara.
Npower blamed climbing wholesale energy prices and the rise in the cost of delivering Government policies, such as the roll-out of smart meters and renewable energy support, for the move.
Npower’s domestic market boss Simon Stacey said: “This is a hugely difficult decision, and we’ve delayed the date this takes effect until after the coldest months of the year.”
The proposed rise is 15% for electricity and 4.8% for gas, and some of this can be linked to the increase in wholesale prices in the last 12 months, which has tended to track the rise in the price of oil.
However, we are now beginning to see the inevitable effect of the government’s green policies taking hold:
During this coming financial year the cost of environmental levies, all of which get passed on via consumer bills, is set to more than double to £9.7bn from 2015/16.
Add to that another £3bn a year for smart meter rollout and we get close t0 £13bn.
The last time I checked, the retail electricity market was worth about £36bn a year, (at about 300Twh @ 12p/kwh, this sounds about right). That means that green policies are accounting for more than a third of electricity bills.
The government has been fortunate over the last couple of years because falling wholesale prices have kept the lid on the impact of rapidly rising environmental levies.
It is disingenuous of OFGEM now to try to push the blame onto energy companies.