From the TUC

A few facts to swat renewable energy myths

15 Dec 2011, by in Environment

Contradicting the myth makers (see below), domestic energy bills are not currently high due to the cost of investing in renewable energy. If only they were, some would say. According to the independent Committee on Climate Change, the average dual-fuel household energy bill increased from £605 a year in 2004 to £1,060 in 2010. Just £75 of this £455 increase was due to low carbon and renewable energy investment. And £30 of that covers energy savings measures like loft insulation.

Gas prices lead to high energy price rises. Still, there’s no pleasing the Global Warming Foundation. It headlined  this report today as: Electricity Bills To Rocket By 25% Because Of ‘Green’ Targets, a lead story taken verbatim from the Daily Mail.

The lion’s share of the increase in our energy bills has been due to the Big Six energy suppliers passing through the increase in the market price of gas and electricity. Renewables haven’t been pushing up our bills so far, and we lag well behind many European competitors in renewable energy supply.

Looking ahead to 2020, the Committee expects an average bill of £1,250, of which about  £110 of the increase is due to investment in low carbon energy capacity, including an average of about £10 to support energy savings like smart meters.  The Mail comments: “The study concluded that electricity prices are likely to rise by 41% by 2020 in real terms – with more than half the increase a result of switching to ‘low carbon’ energy sources.”  However, the CCC shows that increases in the price of gas will add £175 to energy bills, some of which will be offset by measures to reduce consumption.

Yet it’s fair comment that the new ‘carbon price floor’ from 2013 will act as an unrebated tax passed through to consumers’ energy bills. It will raise £3billion a year for the Treasury by 2020. The CCC remarks that the carbon tax is “Creating an opportunity for offsetting tax reductions” or additional public spending to offset energy bill impacts on households.

The Climate Change Committee therefore tackles two myths:

  • Energy bills are high due to the cost of low carbon policies: No. Only 7% of the increase is due to renewable and energy saving measures.
  • Future investments in renewables will drive energy bills up to £3,000 or more a year. No they wont. Required investment in renewables will be about £30bn and not the £100bn widely reported. And renewables may have high upfront costs but benefit from low running costs, not having to pay for fuel.

But then last Friday, when in Scotland hurricane force winds of up to 165mph blew over high sided vehicles and school buses, brought down power cables and even wee dogs couldn’t walk in the wind, the Mail’s front page depicted a burnt out wind turbine with the comment: New questions are being asked about wind turbines.

What drives all this myth making? Former Conservative Trade Secretary, Peter Lilley, offered this thought to the newspapers today:

‘The truth is that we do not yet know how big the effects of carbon dioxide are on the temperature, still less the balance of harm it will do. We are penalising the current generation on the basis of protecting future generations from an unknown threat.’

One Response to A few facts to swat renewable energy myths

  1. Clare Fernyhough
    Dec 18th 2011, 1:04 pm

    Recently because we have had a mild autumn – which we have had more of than the cold we have experienced during the autumns of 2009 and 2010 – energy companies threatened to raise prices because we had not consumed enough energy.

    This sums them up completely. People who can pay more would be quite willing to do so if in fact more energy was being produced from renewable sources, but the fact is that in the long term there is no profit in this for the big suppliers. It in fact suits them completely not to. For example, if the majority of households produced their own energy via solar, wind and micro generation, the energy companies could hardly charge the prices they do now since they would not be buying the majority of energy on the open market.

    The sad fact is however that each time the companies put the prices up, people switch off. Me and my neighbours just don’t have lights on at night any more. My emersion heater is broken but I haven’t bothered to ask the housing association to fix it; I just can’t afford to use it any more. Me and my neighbours now only shower once a week, and since I do not have gas central heating, only lukewarm water from my multifuel burners, I wash in cold water every day. My friend also relies on coal, and we both eek our supplies out; scrooge eat your heart out. Thank goodness though that we haven’t had another cold winter, although we are freezing just with the weather as it is. I go to bed with 3 pairs of pyjamas on and a thick jumper.

    In the end, poor people have to switch off and bear the cold. This is the stark reality of the unchecked rise in energy prices. Meantime, those who can afford continue to live in comfort during the winter. Such inequalities are developing remaniscent of a true Dickensian novel in this country, and we are powerless to stop it.