Thursday, November 14, 2013

Edinburgh economist key in challenging govenment energy figures

An article in this week's Spectator challenges the assumptions and the figures behind the Government's energy policy.
 "For years Britain has, like Germany, chosen green energy over cheap energy — and piled regulation after regulation, levy after levy, on the providers of fossil fuels. In Germany the effect is now becoming apparent: the sacrifice of industry on the altar of environmentalism. It may sound like economic suicide, but it is precisely the policy which David Cameron’s government is pursuing.Energy now stands at the very centre of British politics, a subject enlivened by Ed Miliband’s pledge to freeze household energy bills. His policy is wildly popular, seeing as gas and electricity prices have roughly trebled in the past ten years. More than five million households are now in fuel poverty. As winter advances, the choice between heating or eating isn’t some abstract slogan, but a daily dilemma. Each winter in Britain, some 25,000 elderly people die from the cold."
The article, by David Rose (no relation), highlights the effect of implementation of the current energy bill on fuel prices.
". . .  Parliament has been dealing with the closing stages of the Energy Bill. This, working in concert with its predecessor, the 2008 Climate Change Act, will inflict the biggest fuel bill increases of all. The 2008 measure enforces a legally binding carbon emission target for 2020. But because it’s much harder to cut emissions from transport and heating than electricity generation, this will mean trebling the proportion of power produced by renewables from its current 11 per cent over just six years.
The cost of this swift and radical transformation dwarfs marginal items such as the eco levy. According to the ‘levy control framework’ established by the Energy Bill, it means more than tripling renewable subsidies to £7.6 billion by the end of this decade. The total renewable subsidy which UK consumers will have paid via higher energy bills for the ten years to 2020 will be an almighty £46 billion.  Even this eye-watering figure is a massive underestimate."
Then the contribution from Professor Gordon Hughes of Edinburgh University:
"According to the energy experts Professor Gordon Hughes of Edinburgh University and Peter Atherton of Liberum Capital, the Energy Bill figure does not factor in the enormous cost of connecting wind turbines to the National Grid, nor the complicated switching mechanisms needed to deal with the fact that no turbine will actually produce power for more than a third of the time."
Then the article goes on to give more details.  Time for a U-turn.