Energy secretary Ed Davey has dismissed as “fictitious” claims by the Taxpayers’ Alliance that green energy policies will drive energy bills up significantly.

In its campaign “The Energy Swindle”, launched earlier this month, the alliance, which claims to act on behalf of taxpayers for transparency and efficient tax spending, – declared energy bills are set to soar by 29% by 2020, solely because of green energy policies and subsequent tax additions to average household energy bills.

The alliance called on ministers to stop tax hikes to subsidise renewable energy projects, calling the utilities tax an “affordability crises” and a government “vanity project”. Instead the Alliance proposed investing in “modern” coal and shale gas energy resources.

Writing in the Daily Mail newspaper, Matthew Sinclair, chief executive of the Taxpayers Alliance, said “politicians are adding to the problem with extravagant subsidies for expensive sources of energy” and that the European Union renewable energy target for 2020 “was a bad deal for Britain” and should be discarded. He also called for the end of the carbon tax introduced in 2010.  

Sinclair also said: “People who are already finding it hard to pay bills will not be able to cope with big increases in prices needed to meet draconian targets.”

But Davey retorted that the Taxpayer Alliance’s numbers where “plain wrong” and that there is “no good foundation to your claim” that energy bills will rise by 29% by 2020. Davey referred to DECC economists and commentators.

Explaining the difficulty in paying for energy bills as a reality for many UK households, Davey said: “I share a concern to cushion the public from rising prices with improved energy efficiency and greater competition in the market.”

He also said the Taxpayers Alliance was “disingenuous” to try and “pin the blame” on government policies for green energy by using “inflated assessments of their impacts while ignoring the main driver for price increases – rising global fossil fuel prices”.

Davey said 60% of the increase in energy bills between 2010 and 2012 was from the rise in fossil fuel prices.

The major flaw in the alliance’s campaign Davey said was the assumption fossil fuel prices will remain the same up to 2020 and 2030, despite government predictions that prices will rise.

Previously, Davey guaranteed prices for renewables up to 2019 to expand the industry and attract investment in the UK market.

“Investing in home grown alternatives is the only sure-fire way of insulating our economy and bill payers from price volatility” Davey counteracted.

On 15 July, Sinclair publicised another letter in response to Davey’s claims their figures are wrong.

The Stop the Energy Swindle campaign used numbers from Liberum Capital – a UK real estate investment trust who also provide research figures for clients, as an “objective research house”.

Sinclair defended the Liberum Capital numbers calling them “realistic” and based on “reasonable investment” costs of renewable energies needed.

He also said ministers have a “schizophrenic” attitude towards shale gas, and that gas prices could fall with different policies and investment.

The defence that rising prices will be offset with energy efficiency improvements by ministers is according to Sinclair “the most dishonest part” of green taxes impact on energy bills.

Sinclair also called “boasts” in investment of UK renewables “depressing” and said the alliance plans to continue its campaign against green energy subsidies.