A ‘zombie’ levy has hit households with decades of higher electricity bills

A “zombie” energy levy is eating your money.

The renewables obligation has grown from nothing to cost every UK home more than £100 a year – and it’s set to keep growing even though it was abolished eight years ago. The Telegraph has the story.

The green energy subsidy was closed to new entrants in 2017 but is still poised to add £38bn to UK power bills over the next five years, documents from the Office for Budget Responsibility (OBR) have revealed.

A decision by the Labour politicians who created it 25 years ago means costs are still rising – and it will add an average £108 to every household power bill this year.

The renewables obligation was a scheme set up by Tony Blair’s government to encourage developers to build more green energy generation capacity, such as wind and solar farms, and to push suppliers to buy more clean power.

But a decision to link the cost of the scheme to an outdated measure of inflation has led to spiralling costs, meaning the renewables obligation is now by far the biggest of the six main green levies added to Britain’s power bills.

It has added over £75bn to the nation’s energy bills between its introduction in 2002 and now – and it will continue rising.

The “zombie” levy cost £6.7bn in 2023-24, according to the OBR, but this is forecast to jump to £8.5bn by 2026, a 25pc increase.

It implies annual household energy bills could increase by at least another £20 over the next two to three years simply because of the subsidy.

John Constable, director of the Renewable Energy Foundation, a charity focused on energy data transparency, said successive governments had lost control of the system, with consumers paying the price.

“Even though it was killed off for new entrants in 2017, the renewables obligation system is still costing consumers more each year.

“A combination of bad initial design and foolish revisions favouring the wind and solar industries has turned the system into a zombie levy, devouring householder cash and sucking the blood from our businesses. Any future government that wishes to restore the UK to economic health will have to use primary legislation to finally kill it off.”

Read the full story here.