Energy firms' cash grab in spotlight

An estimated £110 billion is needed over the next decade to renew Britain's ageing electricity infrastructure.

To address this Energy Secretary Ed Davey has set out fresh proposals to cut demand for electricity and instead use low-carbon power sources such as wind farms.

But critics say that the changes laid out in the Energy Bill published today will be paid for by a massive increase in households' bills.

Labour MP Ian Lavery said: "Looking at the sequence of events following the privatisation of energy, the government trousered billions of pounds upon the privatisation of Britain's energy sector.

"The privatised energy companies continued to under-invest in energy infrastructure and now we have a position where billions of pounds is required to bring that infrastructure up to date.

"This Energy Bill is designed to ensure that the taxpayer pays that money."

Mr Davey has assured that state support for low-carbon electricity will cost the average household less than £100 a year, while the government believes that the spending level for low-carbon power subsidies will allow Britain to meet goals to supply 30 per cent of electricity from renewables by 2020.

But environmentalists say the Bill does not go far enough because it does not include a target to slash carbon emissions from the power sector by 2030.

Friends of the Earth executive director Andy Atkins said: "Chancellor George Osborne's fossil-fuelled economic strategy will keep the nation locked into dirty gas for decades - and with experts predicting gas prices will carry on rising, cash-strapped households will be forced to foot the bill."

Environmentalists point out that while investment in renewables has been presented as being responsible for rising energy bills, they argue the rising cost of gas is the main factor pushing up bills.

According to Ofgem energy bills went up by £150 last winter and £100 of this rise was due to the increased cost of gas.