Households already under pressure from soaring energy tariffs will see gas and electricity bills rise by an extra 20% for the UK to fund ambitious emission targets, a report has said.
Consumers will have to fork out an extra £5.3 billion by 2020 to meet the European Union’s emission and renewable energy goals – price rises which come on top of sky-high bill hikes, according to Ernst & Young.
There are already fears that energy costs could rise by up to 40% this year alone as oil prices continue to keep rising.
But the report, called Costing the Earth, claimed that the EU 2020 targets for emission and renewal energy will further compound the energy cost pressures.
The study estimates that households will have to pay £213 more by 2020 to fund the £100 billion or more of capital investment needed by the UK to meet the EU requirements.
Simon Harvey, a director in the utilities team at Ernst & Young and co-author of the report, said: “Customers face a triple whammy – rising fuel and oil prices, the costs of climate change mitigation, and on top of both, the additional investment required to become more energy efficient, for example by insulating the home.”
But the report also found that consumers are not prepared to pay more for their energy to combat climate change.
More than two thirds of consumers surveyed for the report said that they would not and should not have to pay more and half said they would not reduce energy consumption.
“The average consumer does not appear to realise that this additional cost is going to hit their wallets,” said Mr Harvey.
“There seems to be a worrying degree of apathy among consumers to reduce energy consumption, despite daily headlines about rising fuel bills.”