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Who Pays? The impact of energy policy on consumer bills

Two reports for Consumer Focus on the impact of environmental and social policies on consumer bills

As part of Consumer Focus’s “Who Pays?” programme, ACE Research was commissioned to produce two reports about the impact of environmental and social policies on consumers’ bills.

With energy prices rising, fuel poverty becoming more widespread, and households struggling to afford their energy bills, some have sought to blame energy and climate change policies that often result in a direct or indirect levy upon energy bills. A lack of transparency over the magnitude and distributional impact of these costs has made it difficult for stakeholders to make considered judgements.

Government and the Committee on Climate Change have responded by publishing assessments of the impact policies currently have on energy bills, and the likely impacts by 2020.  Such assessments depend upon a range of assumptions. Using a combination of housing stock and household models, the report entitled “Impact of future energy policy on consumer bills” presents evidence on the potential range of energy bills under different assumptions, the structure of the costs that are passed through to consumers, and explores the distributional impacts of bills in 2020.

The principle of recovering the costs associated with UK environmental and social policies via consumer energy bills or taxes is not a new one.  The report entitled “Past and future trends in environmental and social levies seeks to quantify the historical costs and average cost per household associated with such policies from 1990 to 2010 (see Figure 1), and forecast future costs from 2010 to 2020.  In light of the controversy around the Government’s proposal to reduce the support for small scale renewable electricity (Feed-in Tariff rate for photovoltaics), this paper also explores the cost implications of two different tariff scenarios investigated by Government.

These reports were co-authored by ACE Research and the Centre for Sustainable Energy.

Download the two reports here:

Impact of future energy policy on consumer bills

Past and future trends in environmental and social levies

The synthesis report by Consumer Focus is also available here.

 

costs graphic

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