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Green taxes on household electricity bills are holding back families from buying electric cars or switching to heat pumps, two of the UK’s largest energy suppliers have warned.
EDF Energy and Octopus Energy said the existing eco levies should be shifted from domestic electricity to household gas bills to incentivise families to shift to cleaner technologies.
UK electricity is at present four times more expensive per unit than gas for households, in part because of levies added on to bills to support renewable energy such as new wind and solar farms, as well as supporting vulnerable households. The surcharges account for about 17 per cent, or £142, of a typical household’s annual electricity bill.
The previous Conservative government drew up plans to move the levies on to gas bills, but had not done so by the time it lost this month’s general election.
The Department for Energy Security and Net Zero declined to comment on whether it was considering such as move, but said: “We are committed to lowering the cost of energy for families by investing in clean power and boosting the UK’s energy independence.”
Labour’s manifesto included a pledge to make Britain a “clean energy superpower” and reinstating plans to ban the sale of new petrol and diesel cars by 2030.
Moving surcharges on to gas bills could be controversial at a time when the vast majority of Britain’s households still run on gas boilers, particularly in the wake of the energy crisis triggered by gas price rises.
EDF and Octopus on Tuesday launched an “Electrify Britain” campaign that will also call for new homes to be fitted with cleaner heating equipment, such as heat pumps instead of gas boilers.
Simone Rossi, chief executive of EDF Energy, which serves about 3.5mn UK households and is part of French state-owned EDF, said: “Electricity costs much more than gas in the UK.
“We understand this is the result of past policy decisions over several years, but the time has come to change it.
“Otherwise, the future ahead of us will become inaccessible as people will find it hard and overly expensive.”
Greg Jackson, chief executive of Octopus Energy, which is the UK’s second-largest household energy supplier serving almost 7mn households, said: “Our view is that electrification is key to decarbonisation.
“There’s a lot of discussion about the source of electricity — but there’s been really no overarching campaign about the electrification of end use.”
It is far from the first time calls have been made to move the charges off electricity bills, with campaigners in 2021 calling for an “end to the perversity of overtaxing electricity”.
Jackson added that the shift would increase dual fuel bills for households using gas-fired boilers by “£1 or £2 a month” while households that did not use gas would “save £100 to £200 a year”.
