People living near planned pylons and electricity substations are set to receive up to £10,000 off their bills over a decade under proposals being announced by Jeremy Hunt.
But fuel poverty campaigners warned Mr Hunt that the £1,000-a-year subsidy would help many wealthy Britons in the countryside while others face a dire choice between heating or eating.
Jonathan Bean, of Fuel Poverty Action, said slashing bills in areas with anti-energy project campaigns was an “ill-conceived government policy, creating a huge postcode lottery” when it came to gas and electricity bills.
“This would mean unaffordable pricing remains for most, whilst a lucky few pay half,” the campaigner told The Independent – noting that current average bills are around £2,000 a year.
“It’s so untargeted – there’s no attempt to address poverty,” said Mr Bean. “It’s pretty crazy that some wealthy people in huge homes in the countryside could get a big discount, when we’re seeing some people forced to turn off their heating or forced to go to food banks.”
Rishi Sunak’s energy networks commissioner recently recommended that residents should get “generous” compensation if they agree to new power lines near their homes.
Wind farms and solar farms face lengthy delays in connecting to power networks because of Britain’s ailing grid infrastructure – but “not in my backyard” campaigners are increasingly active in pushing against any new pylons in their area.
Former environment secretary Therese Coffey is among the senior Tories to have lobbied against a new high-voltage transmission line running from Norwich to Tilbury in Essex.
The Treasury declined to say who would be paying for the planned discount on energy bills, or how it could amount to £10,000 per household over a decade.
Matt Copeland, head of policy at the National Energy Action campaign to eradicate fuel poverty, said the compensation was “not a substitute for the UK government supporting vulnerable people with their sky-high energy bills”.
He added: “Millions of households will be cold at home this winter if no further support is announced in the autumn statement this week.”
Fuel poverty campaigners have called for a social tariff that would see cheaper bills for those on low incomes, more action to stop the forced use of prepayment meters, and an end to standing charges used by energy firms to recover the costs of providing services.
Responding to the idea of discounts in areas where there is planning opposition, shadow chief secretary to the Treasury Darren Jones said the Tories were “out of ideas and now looking to Labour for the solutions”.
Sir Keir Starmer’s party has already promised that residents who agree to new, local renewable energy projects will get cost-of-living discounts.
The Liberal Democrats were more critical of the plan. The party’s Treasury spokeswoman Sarah Olney said the scheme “would create a postcode lottery system leaving millions of families still facing higher energy bills while others benefit”.
Mike Childs, head of science and policy at Friends of the Earth, said that if offering financial incentives to communities can speed up connecting green energy projects to the grid “then it will be money well spent”.
But he warned that it won’t be enough to boost green energy projects. “One of the biggest blockers to ramping up our production of homegrown renewable energy is the government’s unfair planning rules, which amount to a de-facto ban on onshore wind in England.”
Mr Sunak’s move on bills will come alongside plans to halve the time it takes to deliver new electricity networks to seven years, and a prioritisation of the rollout of electric vehicle charging points.
Officials argued the reforms are part of plans to boost economic growth and to help the UK hit net zero, after Mr Sunak faced criticism for watering down climate plans.
A new “premium” planning service across England would aim to speed up pre-application services for major projects in exchange for a fee and refunds when not met.
A Treasury source with knowledge of the plans argued that expanding the power grid would “unlock global investment for Britain and bring improvements for people across the country, with energy security that will keep energy costs down”.
The plan to boost the electric vehicle industry with more charging points comes after Mr Hunt revealed he had spoken to Elon Musk about getting a Tesla factory in the UK.
Meanwhile, shadow chancellor Rachel Reeves will on Sunday unveil Labour’s “better off plan” to cut household bills by up to £3,000 a year.
Over a decade, Labour pledged to drive down bills by insulating homes, generating cheaper energy, cracking down on unfair insurance practices and driving up housebuilding.
Ms Reeves said: “The economy is not working for working people. After 13 years of economic failure, families are worse off, with higher taxes, higher mortgage payments and prices still rising in the shops.”