October 19, 2021

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Green switch risks hitting the poor hardest as energy prices keep surging

British households pay an average £200 surcharge on their dual-fuel electricity bill to help encourage the uptake of renewable energy and energy efficiency, and to support poorer households with their bills.

That falls most heavily on electricity bills, about 25pc of which (average £159) are made up of environmental and social costs, compared to about 6pc (average £41) of a gas bill.

Eventually hydrogen will be available as an alternative to a gas-fired boiler, and electric heat pumps can also be used to extract energy from the soil. However, the hydrogen transition remains years away and pumps currently cost about £10,000, putting them beyond the reach of most households.

Ms Rosewell said: “It’s a very important transition. We have to do it. But we have got to make sure that it’s done in an effective and an efficient way.”

Ministers are trying to set out green policies ahead of the Cop26 climate change conference, which is due to take place in Glasgow in November.

European natural gas and power prices jumped to fresh records on Thursday, with the UK contract for next month surging 17.4pc to a new high of 252.53p a term.

The price cap on energy bills has gone up from today by £139, pushing average bills to £1,277, and is expected to climb again in April. Nine household energy suppliers collapsed last month in the face of the soaring wholesale prices, with more expected to follow.

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