Energy bills to be hit by £280 a year 'green tax'

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Energy bills will rise in the coming years as a direct result of government policies, the Department of Energy and Climate Change has admitted.

In its annual energy statement, it has said that the government's green policies will increase the cost of electricity by 27% by 2020.

At present, the average household pays £89 a year on their bills to support the government's green energy drive. But this amount is set to rise every year until it hits £280 in 2020. The extra cash will provide around £8 billion a year towards the £200 billion cost of new wind farms, nuclear power stations, a new pylon network and fitting more solar panels.

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Green Deal programme

The Energy and Climate Change Secretary Chris Huhne has defended the rises saying they will be counteracted by other government policies to help people reduce the amount of energy they use.

Huhne has unveiled a new Green Deal programme to promote energy efficiency that is designed to encourage consumers to take out loans to help make their homes more energy efficient, and therefore reduce their energy bills.

"I want to insulate Britain's homes not just from the cold weather, but also from the chill winds of global fossil fuel prices. It's these that are pushing up consumer energy prices," says Huhne.

"We will secure our energy at the lowest cost: in the short term by promoting competition; in the medium term by insulating our homes and in the long term by steering us away from excessive reliance on fossil fuels and on to clean, green and secure energy."

However, with households already struggling with soaring energy bills most people aren't going to be happy about paying more today in order to prevent possible rises in the future.

"There is a real sense of 'jam tomorrow' in Chris Huhne's announcement today. The fact is that the UK is on the brink of an affordability crisis when it comes to household energy and it will be difficult for consumers if they have to carry the cost of these policies before seeing the benefit," says Thomas Lyon, energy expert at