By Paul Homewood
Earlier I posted on the news that Department of Energy & Climate Change (DECC) tried to cover up official data showing how electricity prices are expected to skyrocket, as a direct result of climate policies. (See above Telegraph article).
I’ve now had a chance to dissect this data.
They base their assumptions around three scenarios of fossil fuel prices – high, central and low, and all numbers are at 2014 prices, so do not reflect normal annual inflation. They do not clarify exactly what constitutes the fossil fuel price bands, but they use Sep 2014 wholesale electric prices as the starting point.
Let’s start by looking at the central band. First the effect on households.
I have not shown the projections for 2030, as these are little more than guesswork. The key numbers are:-
1) The various green levies will add £188 to household dual bills by 2020, about 13%. Of this, we are already paying £89/yr.
2) Based on 26 million households, this will equate to £4.9 bn a year by 2020.
3) DECC claim that we will all be saving £276 on average by using less energy because of their kind and thoughtful policies. This rather ignores the fact that energy efficiency has continually improved over the years without government help.
4) Notably, a large chunk, £77, arises from “building regulations”. Unfortunately, very few people live in new houses affected by this, and therefore will not save a penny.
5) Electric only households will be disproportionately affected, as electricity price rises will be much greater than gas. The projected green levies will add 23%. It should be remembered in this context, that government policy is to massively switch consumers onto electric heating of homes and electric cars, leaving us ever more vulnerable to higher electricity prices.
DECC have been a bit crafty in the way they have presented their figures, as the “Bill impact of price effects” is calculated against the anticipated lower consumption figures. For instance, household electricity use is expected to fall from 4.5MWh to 3.2MWh by 2020.
The reality is that they expect electricity prices to rise from £141/MWH to £194/MWh by 2020, as a direct result of their policies, an increase of 37%. If we carry on using 4.5MWh a year, the extra cost to households will be £238.
Based on a low fossil fuel price scenario, the extra cost of climate change policy is even greater, adding 42% to electricity prices. Even under the high fossil fuel price option, climate policies will still be adding 29%, and as consumers will be paying more still for energy, the slightly lower climate subsidy won’t come as much of a consolation.
It is also worth pointing out that,even under the high fossil price scenario, by 2030 climate policies will have increased the price of electricity to £233/MWh, from £181/MWh without such policies. In other words, the argument, often wheeled out, that we need renewable energy to protect us from ever rising fossil fuel prices, is dead in the water.
Effect on businesses
The effect on small and medium sized businesses is, if anything, even more scary. Again using the central scenario, we can see that small businesses will be paying 50% more for their electricity, and medium sized ones an astonishing 62% extra.
As the Renewable Energy Foundation correctly points out, it is domestic households which will end up paying for these extra costs to business, through higher prices, lower wages and lost jobs. That is, of course, assuming we have any businesses left.
Following the non agreement that appears to have emerged from Lima, there can be no possible justification left to continue with the flawed and huge expensive Climate Change Act. It is not difficult to see why DECC attempted to hide this data from the public.
All of the DECC data is here.