Energy suppliers say UK green taxes on electricity bills are discouraging people from using electric vehicles

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Britain’s two biggest energy suppliers have warned that green taxes on electricity bills are stopping families from buying electric cars or switching to heat pumps.

EDF Energy and Octopus Energy have said that current green levies should be moved from electricity bills to gas bills to encourage families to switch to cleaner technologies.

Electricity in the UK is currently four times more expensive per unit than gas for households, partly because of levies added to bills to support renewable energy sources such as new wind and solar farms, as well as supporting vulnerable households. The levies account for around 17 per cent, or £142, of a typical annual household electricity bill.

The previous Conservative government had set out a plan to pass the levy on to gas bills but failed to do so before losing the general election this month.

The Department for Energy Security and Net Zero declined to comment on whether it was considering such a move, but said: “We are determined to cut energy costs for families by investing in clean energy and making the UK more energy independent.”

Labour’s manifesto included a promise to make Britain a “clean energy superpower” and reinstate plans to ban the sale of new petrol and diesel cars by 2030.

Transferring the additional charges to gas bills may be controversial at a time when the vast majority of households in the UK still use gas stoves, especially in the face of the energy crisis caused by rising gas prices.

EDF and Octopus launched the Electrify Britain campaign on Tuesday, which will also call for new homes to be fitted with cleaner heating appliances such as heat pumps instead of gas boilers.

Simone Rossi, chief executive of EDF Energy, which serves around 3.5 million homes in the UK and is part of French state-owned company EDF, said: “Electricity in the UK costs significantly more than gas.

“We understand that this is the result of past political decisions made over several years, but it is time to change that.

“Otherwise, the future that awaits us will become inaccessible because people will find it difficult and too expensive.”

Greg Jackson, chief executive of Octopus Energy, the UK’s second largest energy supplier, serving almost 7 million homes, said: “We believe electrification is key to decarbonisation.

“There is a lot of discussion about the source of electricity – but there has really been no comprehensive campaign on end-use electrification.”

This isn’t the first time calls have been made to remove the fees from electricity bills. In 2021, activists demanded an “end to the perverse approach of over-taxing electricity.”

Mr Jackson added that the change would increase dual fuel bills for households using gas boilers by “£1 or £2 a month”, while households not using gas would “save between £100 and £200 a year”.