The Committee on Climate Change (CCC) has warned that the fuel poor and energy-intensive industries will need government support to compensate for rising energy bills.
In its third assessment of the impact of carbon budgets on energy bills, the CCC found fuel-poor households will need support that goes beyond existing energy-efficiency schemes.
For industry, the government has put a compensation package in place that the report says is likely to be sufficient through to 2020.
Energy prices and bills – impacts of meeting carbon budgets found that out of a typical energy bill costing £1,140 in 2013, householders paid around £55 per year to support energy-efficiency schemes and £45 per year to support low-carbon electricity.
The £55 contributed towards energy-efficiency schemes helped pay for 200,000 boilers and heating controls to be installed for low-income or fuel-poor families.
It also supported the insulation of nearly 200,000 homes (cavity walls, solid walls and lofts). These actions have reduced energy costs and saved carbon.
Some 40% of these insulation measures benefitted low-income or fuel-poor families.
CCC chairman Lord Deben said: “Last year, as energy consumers we all helped hundreds of thousands of poorer people to have warmer homes and contributed to real reductions in our emissions in the fight against climate change – all for around £100 per year on the average bill.
“Many people saved more than that by taking simple energy-saving measures that didn’t interfere with their lifestyle.”
The report found the primary causes of energy bill increases since 2004 have been down to a rise in the international price of gas and investment in electricity/gas networks.
The CCC is an independent statutory body established under the Climate Change Act (2008) to advise the UK on setting and meeting carbon budgets, and preparing for climate change.
The Climate Change Act requires that the CCC report annually to Parliament on progress in meeting carbon budgets. The CCC has so far published six progress reports: in October 2009; June 2010; June 2011; June 2012; June 2013; and July 2014.
In 2015, it is due to publish its advice to government on the fifth carbon budget (2027-2032).