Consumers seen unprepared for rising energy bills

Energy bills are set to climb by over 200 pounds a year to help pay the costs of meeting a European Union goal of cutting greenhouse gas emissions by a fifth by 2020, consultants Ernst & Young said on Monday.

Under proposals presented by the 27-nation bloc's commission in January, the UK will commit to generating 15 percent of its energy from renewable sources like wind and solar, or more than triple the current levels.

The EU's Renewable Energy Directive is expected to cost UK consumers some 5.3 billion pounds annually, or around 213 pounds per household, according a report called 'Costing the earth?' by Ernst & Young.

Half of the increase will be represented by higher market prices for energy and EU carbon emissions permits as well as the introduction of more sophisticated electricity meters in homes nationwide, the report said. Another third would go directly towards expanding the UK's current renewable energy mix.

"The average consumer does not appear to realise that this additional cost is going to hit their wallets," said Simon Harvey, a director at Ernst & Young.

In an online poll conducted by the company, half the British consumers surveyed said they would not cut back on their energy use, even at higher prices.

The YouGov.com poll also showed that 96 percent of the 2,400 respondents disagreed with the statement my home energy bill needs to rise to help combat climate change'.

"There seems to be a worrying degree of apathy among consumers to reduce energy consumption, despite daily headlines about rising fuel bills," Harvey added.

Britain's 2007 emissions were 639.4 million tonnes of carbon dioxide equivalent, down some 19 percent from the 1990 levels used as a baseline under the Kyoto Protocol.

Power utilities make up around 40 percent of all UK emissions, with energy generated by burning dirty coal accounting for a large portion of this.

"There's still a long way to go to convince the public of the personal costs of achieving emissions cuts," Duncan Coneybeare, an analyst at Ernst & Young, said in a statement.