Friday 29 August 2014

The expensive levies that were not...


As energy prices in the UK keep rising we have come to realise that between 2010 and 2013 the rise reached 37%. Not surprisingly the energy industry (see the big six) were quite fast to blame the "Green Levies" for the soaring energy prices. Right... you may think; that nearly makes sense. After all you must have heard of the subsidies that support the operation of wind and solar farms and the UK; they must have something to do with your rising bills or not really...

Chart _1
I am copying the above graph from the excellent carbon brief blog which you can find here. These are cost estimates of the energy companies for the social and environmental levies. That's at least about £110 on the average household. Now even for British Gas (see graph) that does not exceed 10% of the average UK bill. How come its the sole most mentioned reason for our expensive energy bills?

At some point the figures were even backed by the Coalition Government which went as far as saying that they may soon reach £194 by 2020. This time the estimations are not just about the Green levies but also about social levies; the latter mostly referring to the Government's ECO scheme which was obliging energy companies to offer energy efficiency improvements to low income households.

As you can imagine the energy industry was pretty happy to eventually have their nemesis aka green and social levies removed. So happy, Ed received a thank you letter! In the meanwhile ONS (Office for National Statistics) reported a record 31000 excess winter deaths, at a 29% annual rise. Was anybody happy about this I wonder? Probably not the energy poor people that would have their houses insulated if it wasn't for scaling back the ECO scheme.

But, that's OK... it cannot be that poor people expect everything from the nanny state (just being ironic!). At least the rest of us got a good deal with the £110 savings that the energy companies passed on our bills. Ha! Whose savings??

After being promised that energy bills would be reduced within weeks. By how much? We were told by £50 on average. Why not £110? Nobody knows... or maybe we know that instead of finding a way to force the energy industry to lower bills, the Government let them enjoy windfall profits which may reach £2bn in 3 years.Were your bills reduced btw? By £110? maybe by £50? or just increased again?

A quick recap therefore would read like: the Government has just offered energy companies a few billions which took away from energy poor people (and support from renewable energy projects) justifying its actions by falsely promising lower bills to the rest of us.

Well done guys...

Monday 18 August 2014

Green energy and jobs... oh and the EU...

Reading on The Telegraph yesterday I found out that "EU green energy laws 'put 1.5m UK manufacturing jobs at risk'". Now, this is mainly The Telegraph repeating a report of the Business for Britain (BfB) Eurosceptic group.

The storyline that the authors put together is that the EU is the source of green energy laws and these laws increase energy costs which eventually threaten the profitability of energy intensive industries which may leave the country as a result and leave behind them unemployed people...

Is this exaggerated maybe?

I should first of all clarify that:

1. Yes, there are energy intensive industries in the UK (and the rest of Europe) and yes, they would love to have low energy prices. In fact, I would also love them to have low energy prices, at least at levels that they would prefer to stay in the UK than leave.

2. Yes, that's an important debate especially when you realise that it's not just the low Chinese energy costs we're competing against but the very low energy costs available in the US (there's a link to shale gas on that matter but I will come to this at a later post). So it's not any more a decision between establishing factories in developed or developing countries but a direct comparison between developed economies.

and then add a few thoughts and observations to the debate:

a. The main Green Energy Laws that the article cites are really one, the Emissions Trade Scheme (EU-ETS). The Renewable Obligation (RO), also mentioned in the article, is not quite an EU law at all.

b. Increased use of renewable energy, which is the aim of RO, is aligned with the current EU policies. Specifically, those looking to achieve an average of 20% share for renewable energy across the EU by 2020. However, a new binding target for renewable energy for 2030 is far from certain.

c. Coming back to what is actually EU law, the EU-ETS has so far recorded rock-bottom carbon prices. Did it really threaten any of the large manufacturers? Not the least, since they've all budgeted for significantly higher prices which were never realised. Whether EU-ETS will survive post-2020 remains an open question.

d. The UK, and not the EU, has the Climate Change Act 2008 which requires the country to reduce its carbon emissions by 80% between 1990 and 2050. This is achievable with a combination of measures relating to improved energy efficiency, increased use of renewable energy sources and nuclear energy. That's the most demanding, long-term climate change target that exists out there and makes the UK world leader in the Climate Change agenda.

So, at this stage let's get one thing right. It's not the EU green energy laws but the UK laws that drive renewable energy investment in the UK. Green energy laws is not a good enough reason to be Eurosceptic I think!

Next post will be about the green levies and their "huge" impact on our bills which was not. Probably linking it with how the Coalition Government handled this issue...


Monday 11 August 2014

The comeback and catching up news!

After several months of blogging silence, I eventually found the time to return to writing here. Last winter has been hectic with work on research and consulting bids and research papers.

A lot has happened in the energy and environmental scene of the UK over the last months and I will probably use some of the next posts to catch up. These will include progress with shale gas and some thoughts on the Coalition Government's green (not) attempts...

In the meanwhile, I thought I should share some exciting news. That is I am about to embark to a trip to the US where I will work at the Department of Geographical Sciences of the University of Maryland, College Park. My next post will be from there!