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The Future Cost of Energy in the UK

April 3, 2013

Future Cost of EnergyEnergy is currently a hot topic; the UK needs to upgrade its ageing generating plant and huge investments are needed over the coming decade.

The twin spectres of climate change and energy security mean we cannot simply burn fossil fuels as we have done previously. Energy sources remain controversial with nuclear and onshore wind power creating particularly voiciferous debates.

Renewables generally are often criticised for attracting subsidies; financial instruments to stimulate and support their growth. Critics of renewable schemes claim these subsidies add unnecessary cost to our energy generation.

Supporters of renewables are quick to point out that the largest increases associated with increased bills are due to wholesale price rises in the cost fossil fuels. A 2011 WWF report states that recent fossil fuel inccreases meant that the average domestic electricity bills rose 63% in the 6 years up to 2009.

In 2012, The Department of Energy and Climate Change released future cost projections for fossil fuels which showed that oil could be $150 dollars a barrel by the year 2020 with as much as 30 pence per therm being added to gas prices within the same period. No matter what your viewpoint, energy prices will climb over the coming decade. Continued fossil fuel price rises will contribute to this, as will the cost of adding further renewable energy generating capacity.

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