EDF Energy has become the latest member of the ‘Big Six’ energy companies to announce price rises, citing "obligatory" investment in renewables as a major driver behind its decision.
The French energy giant will increase its standard variable prices for gas and electricity by 10.8% from December 7, 2012, for all its residential customers.
The company blamed the price hike on “a combination of significant extra costs in the use of gas and electricity networks, mandatory energy efficiency and social schemes, plus the rising price of wholesale energy”.
Announcing the changes, Martin Lawrence, Managing Director of Energy Sourcing and Customer Supply, said: “We know that customers will not welcome this news and do not want to see prices going up.” However, the company claims that it could no longer put off energy price hikes after seeing a sharp increase in its costs since the beginning of the year.
Namely, EDF singles out “the costs associated with the implementation of obligatory renewable, energy efficiency and social schemes increasing by more than 50%” as one of the main drivers behind the energy bill hike.
The Renewable Energy Association recently published a report which shows that renewables support accounted for less than 2% of the £205 average bill rise experienced over the last two years. This year the REA estimates that the cost of supporting renewables for the average bill payer will be £22. EDF estimates that the announced price rise will add £122 a year to a typical standard variable energy bill.
The news will come as a fresh blow to the Prime Minister whose recent energy bills blunder has catapulted the contentious issue straight into the spotlight of the media.
Speaking at the Solar State of the Nation event in central London last night, Ray Noble, PV specialist for the Solar Trade Association called on politicians to highlight the feed-in tariff mechanism as the ideal tool for combating escalating energy bills. Not only would the move alleviate pressure on politicians it would help government raise the profile of the FiT as well as renewables’ potential to reduce energy bills, Noble said.