UK households will have to pay up to 20% more for their energy in order to meet the EU’s 2020 emission targets, an Ernst & Young report has found.
The news comes at a time when wholesale energy prices are already at record highs and rising inflation is eating further into household budgets.
"Customers face a triple whammy - rising fuel and oil prices, the costs of climate-change mitigation, and the additional investment required to become more energy-efficient, for example by insulating the home," says report co-author Simon Harvey.
Fuel poverty risk looms large
In order to meet the EU 2020 targets, the nation will have to cut carbon dioxide levels by 20% and increase the proportion of renewable energy it uses from 5% to 20%.
This will require that consumers find an extra £5.3 billion (excluding any future energy price rises) to help fund the necessary investment, which translates into a 20% energy bill hike for each household.
While that rise may be surmountable on its own, the picture becomes markedly different once you factor in sky-rocketing wholesale gas prices - some analysts expect energy bills to rise by up to 40% this year alone as a result.
This will obviously place a massive burden on household finances and push many into fuel poverty - defined as when a household spends more than a tenth of its income on utility bills.
Customers don’t want to foot the bill
So it is perhaps unsurprising to learn that, while the majority of Brits are keen to combat climate change, they are unwilling to pay more for their energy or use less of it.
"There seems to be a worrying degree of apathy among consumers towards reducing energy consumption, despite daily headlines about rising fuel bills," says Harvey.
"The average consumer does not appear to realise that this additional cost is going to hit their wallets.”
