Green Energy Costs to Double, Committee on Climate Change Reveals

  • Date: 17/03/17
  • Harry Wilkinson, Global Warming Policy Forum

The latest assessment of green energy costs by the Committee on Climate Change (CCC), was reported yesterday by the BBC couched in doublethink worthy of 1984.

They announced, just as five of the big six energy providers raised prices by between 7-10%, that ‘Britain’s low carbon energy revolution is actually saving money for households’. Nothing could be further from the truth. Tucked away at the bottom of a technical annex was a shocking revelation; households would be paying almost twice as much for climate policies than the CCC had estimated in their previous report on energy bills.

The Annex of the report includes an estimate of £235 for the cost of low-carbon policies on household energy bills in 2030, a cost that the CCC claimed in 2015 would only be £125 (p. 21).

Taking business energy costs and taxpayer-funded policies into account, this implies that the overall cost of decarbonisation policies will be over £300 billion by 2030, confirming what Peter Lilley MP has estimated in his report on the cost of the Climate Change Act.

The embarrassment of the CCC was heightened by their acknowledgement that they forgot to include VAT and full evaluations of the system costs of renewables in past assessments. The CCC were also forced to admit that the cost of the Renewables Obligation would be much higher than initially thought.

The report reveals that by 2030, low-carbon policies will account for 32% of residential electricity prices. The situation is even worse for businesses; 40% of the electricity price paid by medium-sized commercial businesses will be due to low-carbon policies, a figure that rises to 42% for large manufacturers. Even with significant compensation, low-carbon policy costs will still account for 27% of the total energy costs of energy-intensive industries in 2030.

These large and damaging costs have been covered up by an erroneous attempt to discount low-carbon policy costs with savings from reduced energy use. The reality is that without climate policies, bills would be much lower. Furthermore, as they themselves acknowledge: “it is not possible to identify how far these improvements would have occurred through technological progress in the absence of policies aiming to reduce emissions”. So it is completely misleading to try and hide the costs of green policies in this way.

Nor is it morally acceptable when so many are already living in fuel poverty. According to the report over 3.7 million are currently living in fuel poverty, including 42% of households in Northern Ireland, and low-carbon polices have caused these numbers to be so high. The largest increases in expenditure on energy bills have been for those in the lowest income quintile. The government should be doing all it can to reduce energy bills, not burdening the poorest with significant policy costs, and then pretending those costs aren’t real or significant.

This latest episode shows that the CCC is unfit for purpose, and is nothing more than a pressure group for the renewable energy industry. It is time the Government took immediate action to reform the selection and workings of the Committee on Climate Change, which has misled the public for long enough.