UK climate targets to hit household bills:gov't adviser

By Nina Chestney and Peter Griffiths

LONDON (Reuters) - British households could face big rises in their energy bills under plans to reduce the role of fossil fuels and cut planet-warming greenhouse gas emissions by more than a third by 2020, Britain's chief climate change adviser said on Monday.

The Committee on Climate Change said the price hike could push more than 1.7 million houses into fuel poverty, when families spend more than a tenth of their income on energy to keep warm.

Reaching its targets could lead to a 25 percent rise in electricity prices by 2022 and an 18 to 37 percent increase in gas prices by 2020, the committee said in its first report to British Prime Minister Gordon Brown's government.

Warnings of higher fuel bills come as Britain faces a deepening recession, with rising unemployment and plummeting house prices.

"I cannot deny that there will be higher electricity and gas prices," Committee Chairman Adair Turner told Reuters. "But that adverse impact can be offset by energy efficiency improvement subsidies."

Such subsidies could include discounted fuel bills for people on low incomes and grants to pay for energy-saving home improvements.

Bills would rise because companies have to invest significant amounts in renewable energy sources and meet higher carbon prices, Turner's report said.

Emissions reductions will cost Britain less than one percent of its gross domestic product in 2020 and between one and 2 percent of GDP by 2050, the report said.