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Updated Oct 21, 2016

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Energy bills to rise higher than planned for green subsidies

Energy bills are expected to rise much higher than expected per household on an annual basis over the next four years.

The final figure, at the end of the four year period, is expected to be around £17 higher per household.

The rise is associated with the cost of green energy subsidies, with solar panels and wind farm installations coming under the subsidies framework.

In order to limit the cost for consumers and businesses, the levy on energy bills was capped at £7.1 billion for 2020/21, however this was warned to surge to £9.1 billion by Government officials as a result of the amount of green energy installations.

The National Audit Office (NAO) have revised this estimation down to £8.7 billion, which works out to the additional £17 to what was already expected to be added to bills.

In a report published on Tuesday, the NAO blamed the expected overspend on the energy department being slow to see that more renewable energy was being deployed than expected because of the subsidies.

Offshore wind farms have generated more electricity than expected. Officials were also accused of failing to gather market intelligence frequently enough.

A spokesman for the Department for Business, Energy and Industrial Strategy said: "Our top priority is ensuring that families and businesses have a secure, affordable, clean energy supply. Our actions have reduced projected costs on the levy control framework by around £520m, and we continue to make further improvements to deliver value for money for consumers."


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