A few facts to swat renewable energy myths
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.’