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Rachel ReevesPledge to take £150 off house energy bill may be destroyed due to the cost of nuclear energyIt has been claimed that hidden green charges and new charges are being imposed by the energy regulator.
In his budget last week, chancellor Promised to take £150 off household bills by scrapping Energy Company Liability (ECO) Scheme,
During the election, Labor promised to reduce bills by £300 million through investment in green energy but this has not yet been delivered.
But former Labor donor and green entrepreneur Dale Vince has now claimed that the £1 billion cost in the first year and ongoing costs for nuclear power will be largely wiped out by the impact of paying to build nuclear power capacity by £150 million.
Further analysis shows that, under plans announced by Ofgem, bills to finance gas pipelines and high-voltage electricity grids are set to rise by £40 a year from £222 in April, when the government’s £150 rebate is due to take effect.
According to Ofgem’s impact assessment, the levy is due to increase over the next four years – reaching £338 a year by April 2030.
Meanwhile, the Office for Budget Responsibility (OBR) also revealed in its report accompanying the Budget that £1 billion a year will be added to household energy bills to fund Energy Secretary Ed Miliband’s next auction for renewable projects, known as “Allocation Round 7” (AR7).
The worry is that instead of household bills being reduced by £150, energy bills will increase.
Mr. Vince said Independent The Chancellor’s much-hyped £1 billion in energy bill savings will be completely wiped out by the cost of the Sizewell C nuclear project – with the Government forcing households and businesses to pay for it years before construction starts.
He claimed the £150 rebate is almost the same as the total annual charge that would hit homes and businesses through the Regulated Asset Base (RAB) nuclear levy created to fund Sizewell C.
He said: “The Chancellor’s energy savings will be wiped out overnight by the cost of Sizewell. From November, the Government has decided to load the financial risk of this project directly onto our energy bills – before a single shovel has even hit the ground. And it’s not a one-off charge.
“We will subsidize Sizewell for at least 10 years, maybe even more – nuclear projects are always late. And we can still pay for decommissioning in the 22nd century.
“Imagine ordering a car and the dealership starts charging you even before the factory builds it – that’s what’s happening here.
“EDF says Sizewell will be ready in 2035, but Hinkley Point is 14 years late and the price tag has ballooned from £18 billion to £46 billion. Sizewell won’t lower bills or help us get to net zero on time – but it will cost us for years.”
He claimed that for a small hairdressing salon the additional cost would be at least £35 and rise to £140.
This levy applies to every home and business connected to the UK grid, with the exception of officially exempted energy intensive industries. Ofgem has confirmed the potential for revenue of £1.4 billion for the first charging period (4 November 2025 to March 2027).
But the government has disputed Mr Vince’s figures.
A DESNZ spokesperson said: “This claim is false. Sizewell C will add on average around £1 per month to household bills during construction, which is a small fraction of the average £150 cost to household energy bills from April announced in the Budget.
“We are ushering in a golden age of nuclear power – securing thousands of good, skilled jobs and billions in investment.
“Sizewell C will provide clean electricity equivalent to six million homes today for at least six decades. Analysis shows it could save £2 billion per year when a future low-carbon electricity system is commissioned, resulting in cheaper electricity for consumers.”