The green energy subsidy was closed to new entrants in 2017, but is still poised to add £38 billion to UK power bills over the next five years, documents from the Office for Budget Responsibility (OBR) have revealed.
A decision by the Labour politicians who created it 25 years ago means costs are still rising – and it will add an average £108 to every household power bill this year.
The renewables obligation was a scheme set up by Tony Blair’s government to encourage developers to build more green energy generation capacity, such as wind and solar farms, and to push suppliers to buy more clean power.
But a decision to link the cost of the scheme to an outdated measure of inflation has led to spiralling costs, meaning the renewables obligation is now by far the biggest of the six main green levies added to Britain’s power bills.
It has added over £75 billion to the nation’s energy bills between its introduction in 2002 and now – and it will continue rising.
The “zombie” levy cost £6.7 billion in 2023–24, according to the OBR, but this is forecast to jump to £8.5 billion by 2026, a 25% increase.
It implies annual household energy bills could increase by at least another £20 over the next two to three years simply because of the subsidy. …
The origins of the “zombie” levy go back to 2000 and Blair’s first government. Stephen Byers, the then-Business and Energy Secretary, piloted the Utility Act 2000 through Parliament, which enabled the renewables obligation system...<<<Read More>>>...