British households face an extra £1,400 A YEAR under net zero plans, report warns

Net zero costs could reach £40billion by the end of the decade

British households could face an additional £1,400 a year in costs by the end of the decade under the Government's net zero plans, new research claims.

The Prosperity Institute estimates that efforts to decarbonise Britain's electricity grid will leave taxpayers funding an annual bill of more than £40billion by 2030/31.

The right-leaning think tank warned that the rising cost of green energy policies would place further pressure on families already struggling with higher food, fuel and energy prices following the conflict in Iran.

Its report, written by David Turver, described the current level of spending as "unsustainable" and warned that it risked causing "serious economic damage" to Britain.

The projected costs are largely divided between subsidies for electricity generation and the expense of adapting and managing the grid.

Electricity subsidies include Renewables Obligation Certificates, Contracts for Difference, Feed-in Tariffs and the Sizewell C levy.

According to the report, the annual cost of these schemes increased from £0.5billion in 2010/11 to £11.8billion in 2024/25.

The think tank forecasts that the figure will rise further to almost £15billion by the end of the decade.

Separate grid integration costs cover transmission network charges, balancing services and the Capacity Market, which helps ensure Britain has enough electricity available when demand rises.

These costs increased from £2.8billion in 2010/11 to £8billion in 2024/25. They are projected to more than triple from their latest level to £25.3billion by 2030/31.

Combined spending on electricity subsidies and grid integration reached £19.8billion last year, six times the amount recorded in 2010/11.

The Prosperity Institute expects the two categories to cost more than £40billion annually by 2030/31, which it calculates would amount to an additional burden of more than £1,400 for each household.

The estimate does not include several other green policy commitments that could add to the overall cost.

The Government has committed £21.7billion over 25 years to carbon capture and storage, while support for green hydrogen could be worth a further £16billion.

The think tank is urging Prime Minister Andy Burnham to move the focus of energy policy away from decarbonisation targets and instead prioritise affordable bills and a reliable electricity supply.

The report recommends renegotiating contracts with renewable energy companies and removing existing subsidies.

It also calls for the Climate Change Act to be repealed or changed, planned expansions of the electricity grid to be reduced and agreements supporting carbon capture and green hydrogen to be cancelled.

Where compensation must be paid, the think tank argues that it should be limited to costs companies can prove they incurred before a set cut-off date.

The report said: "Despite persistent claims that gas is to blame for high electricity costs, it is renewables that have driven a massive increase in the costs of running the electricity system.

"The cost of subsidies and grid integration has risen sixfold since 2010 to almost £20billion per year. Official forecasts show this problem is going to get significantly worse."

However, the Prosperity Institute's calculations are disputed.

The Climate Change Committee, which advises the Government, estimates that reaching net zero will cost approximately £4billion a year, significantly below the figure presented by the think tank.

The committee argues that achieving the 2050 target will ultimately cost less than a single major oil price shock.

It has pointed to the conflicts in Iran and Ukraine as examples of how sudden changes in international fossil fuel markets can push up household energy bills.

Supporters of net zero also argue that expanding Britain's domestic renewable energy supply will gradually reduce its dependence on international gas markets, leaving households less exposed to wars and other global disruption.

The Climate Change Committee has warned that some estimates of the cost of net zero do not include what Britain would continue spending on fossil fuels if the target were abandoned.