Senior civil servant warns of hike in price unless Renwable Heat Incentive is carefully planned

A senior civil servant has warned that gas bills could soar 40% if a mechanism to encourage green energy is introduced.

Hergen Haye, director of heat policy at the Department for Energy and Climate Change (DECC) told an audience at New London Architecture that the hike would result if the Renewable Heat Incentive (RHI) was “not carefully planned.”

A spokesperson from CLG confirmed that consumers could expect gas bills to go up by between 18-37% as a result of the RHI, depending on factors such as oil prices.

“By 40%, he means the top of the band; the least cost-effective way of doing it, with the lowest uptake and a highest oil price,” she said.

“But there’s so much development going on as to how the RHI is going to work, that it’s difficult for us to say just what the best or worst conditions are.”

The RHI will be a subsidy to suppliers of renewable heat or fuel for heating. It will be paid for by fossil fuel suppliers, who are likely to pass the costs onto consumers.

The government is set to consult on the idea in the summer with a planned introductory date of April 2011.