Centrica proposes shifting £5bn in green energy costs out of bills

Centrica proposes shifting £5bn in green energy costs out of bills

The group chief executive of Centrica, Iain Conn, has called for fairer funding of green energy costs and has set out plans to reform the energy market.

The proposals look at how to make funding for cleaner power generation and energy efficiency fairer by removing it from energy bills, which could cut an average of £200 a year from energy bills.

The utility group want the government and electricity regulator, Ofgem, to reform the way in which clean energy infrastructure, such as wind turbines, is paid for by transferring the costs from energy bills to taxation.

In his blog for Politics Home, Conn said: “We’re calling for energy policy costs (which pay for or encourage large, national infrastructure projects among other things) to be moved off the bill and paid for another way such as through taxation.”

He added: “Under the present system, the costs of changing the energy mix in the UK – over £5 billion a year – is equally borne by those who find it hardest to pay their energy bills. We don’t think that’s fair on them. If the cost were paid for out of taxation, it would be linked to ability to pay.”

Conn also announced that Centrica was withdrawing the Standard Variable Tariff (SVT) which discourages consumers from engaging with the market and is “the single biggest problem facing the UK domestic energy market,” according to Conn.

The proposals come weeks after Ofgem’s decision to change the way the grid is funded by increasing the energy bills of houses that have solar panels, which use as much energy as other homes during winter months.

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