MPs have accused the Treasury of making the government’s clean energy revolution unworkable and creating the risk of higher household bills, according to a report by the BBC.
They said Treasury changes to the draft Energy Bill will increase the risk of borrowing for investors and increase the cost of renewable and nuclear power, with customers bearing the extra cost.
The energy and climate change select committee has two major worries about the Treasury’s impact on the draft bill.
The first is about the long-term contracts for developers who are being asked by the government to plough billions in the UK’s low-carbon infrastructure.
Originally, the Department of Energy and Climate Change (Decc) said the government would guarantee the contracts, thereby reducing the risk for investors and allowing them to borrow large amounts at a low rate of interest. But the Treasury has since ruled that the government will not be the guarantor.
The MPs’ second worry is over the ongoing consumer subsidy to renewable and nuclear power generators, which are needed for the UK to meet its legally binding targets.
The Treasury says the subsidy will be limited to hold down the cost to consumers – but it won’t reveal the size of the future cap.
For more information, please see BBC News.