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Energy prices may rise by 30%

Themes: Energy and environment

Dr Michael PollittIf Britain adheres to its current energy and climate policy, consumers could face a 30% hike in retail prices by the year 2030

Internationally recognised energy advisor Dr Michael Pollitt predicts that the UK’s current policy on carbon reduction and green initiatives could see energy costs rise by nearly a third by 2030.

Dr Pollitt, Reader in Business Economics at Cambridge Judge Business School, is also Assistant Director of the Electricity Policy Research Group.

He is concerned that government energy policies and objectives are surrounded by what he calls ‘inconvenient economics’ as a result of the country’s general financial position.

“We need to rethink what the financial crisis and the fiscal crisis in the public sector mean for the amounts of money we’re planning to spend on energy and climate policy in the UK.

“We also need to think about our strategic negotiating position as a country with regard to the current failure of international climate negotiations and whether we’re just giving away our negotiating position by over-committing to stringent targets when that’s not going to help us achieve a global agreement.”

Dr Pollitt added that the current confusion between renewable energy targets and those of carbon reduction needed urgent clarification. The former, he said, may be getting in the way of the latter by making carbon reduction targets too expensive.

Work completed on electricity market reform suggests that, as a result of current government policies, prices could rise by up to 30 per cent in the next two decades to 2030.