Axe Britain’s Carbon Tax To Keep Lights On And Cut Energy Bills, Says ScottishPower Chief

  • Date: 09/12/13
  • Emily Gosden, The Daily Telegraph

Britain’s unilateral carbon tax should be scrapped before it causes blackouts, pushes up household bills and makes the UK uncompetitive, ScottishPower argues.

Keith Anderson, chief corporate officer, warns that the “carbon price floor” (CPF), which taxes companies for burning fossil fuels, will make Britain’s remaining coal plants “largely uneconomic by around the middle of the decade”.

With Britain’s spare power margin already forecast to fall as low as 2pc by 2015, the carbon tax will force more closures and “threatens to make us even more vulnerable to the risk of blackouts”, he warns.

Writing in Monday’s Telegraph, Mr Anderson also calls for a review of Britain’s £12bn programme to install “smart” electricity and gas meters in every home, suggesting costs should be cut to reduce the impact on consumer bills.

Several coal-fired power plants have already shut this year under EU rules to help curb acid rain and pollution. About a dozen plants remain operational and provide about 40pc of UK power; ScottishPower’s own Longannet coal plant powers about one-quarter of Scottish homes.

But a combination of further EU rules and the carbon tax, which increases steeply every year, means most of these coal plants may be forced to close by 2015 or 2016.

“Abolishing the CPF, or freezing it at the current rate, would help to reduce upward pressure on bills, improve UK competiveness and help in cost effectively maintaining security of supply,” Mr Anderson says. “We estimate that abolishing it could save some £33 from a typical dual fuel bill in 2015/16; freezing it at the current rate from April 2014 would save around £24.”

Manufacturing bodies and consumer groups both attacked the Chancellor for failing to cut or scrap the carbon tax in last week’s Autumn Statement, despite the Prime Minister’s pledge to “roll back” green levies.

Mr Anderson also calls for other changes to reduce customer bills, including “a careful review” of the £12bn programme to install meters that send automatic gas and electricity usage readings back to suppliers. His comments come as both EDF and Centrica called for greater co-operation between politicians and companies to address rising bills and keep the lights on.

Ministers hope new wind farms and gas plants will replace old coal plants but investment in both is stalling amid policy uncertainty.

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