RWE npower CEO Paul Massara has called on the Government and industry to come together to provide consumers with a clear message about rising energy costs.

He added that it would also help rebuild trust and give consumers the information required to take action.

A report launched yesterday (16 July) set out how energy bills are expected to increase between now and 2020, to explain what is driving energy costs up, where a customer's money goes and why action needs to be taken to save money and reduce consumption.

Mr Massara explained: "For a long time, blame has shifted back and forth from energy suppliers to government, each pointing the finger at the other for rising costs. This blame game hasn't helped people – if anything, they don't know who or what to believe. It's led to confusion, mistrust, and misinformation, and that's something we urgently need to address.

"A recent npower survey showed that people believe supplier profits are typically about 40%, and general perception is that bills are rising because of supplier-controlled costs. In fact, our profits are more like 5% and the main factor behind rising costs is government police and regulation to fund this country's transition to a more efficient economy, with modern infrastructure and warm, insulated homes for all.


"Government and energy suppliers need to be much clearer about the facts behind rising energy costs, so we can present one clear message to consumers: energy costs will rise, and the only way to control of this is taking action to reduce consumption."

The report, 'Energy Explained', sets out a detailed analysis showing how an average household energy bill could rise to £1,487 by 2020 (an increase of £240 rise, not taking into account inflationary increases) and is primarily driven by the impact of unprecedented investment in new infrastructure, and the cost of improving energy efficiency in people's homes.

Mr Massara added: "Government policy is rightly delivering the transformation we need to address the UK's poor housing stock and encourage investment required in new infrastructure – but achieving these aspirations comes at a cost, and this is what needs to be clearly communicated to consumers. The fact is that if people don't take action to reduce energy consumption, their bills are going to rise. If we can't be upfront about that, we won't be able to convince people to make big changes to be more energy efficient.

"This isn't about shifting responsibility – energy suppliers need to play a big part in communicating this message and supporting customers. We've got to remove confusion and complexity out of energy, which is why we're developing simpler bills and tariffs, and offering energy efficiency support and advice to all of our customers. But the public need to hear a clear and consistent message across the board it we've got any chance at all of helping them to tackle rising costs."

'Energy Explained' looks at how the make-up of domestic energy bills has changed since 2007 and gives an outlook of how they will change from 2013 to 2015 and on to 2020.

It shows that:

• Policy and regulation costs are expected to rise by 78% between 2013 and 2020



• Transportation costs will add an additional £114 on the average domestic bill by 2020



• Supplier costs will remain flat, although the cost of rolling out smart meters will add £24 on the average household bill by the end of the decade



• Commodity costs currently make up 45% of the bill, but by 2020 this will only be 35% as other costs make up bigger portions of the bill.

(JP/CD)