Friday, November 22, 2019
Home News On your utility bill, the soaring price of green gesture politics

On your utility bill, the soaring price of green gesture politics

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IN the murkiest depths of an official release of financial data lurks some fascinating information about just how much the political class’s obsession with renewable energy is costing us. In a blog published yesterday by the Global Warming Policy Forum, my colleague John Constable outlines the contents of Supplementary Table 2.7 of the Office of Budget Responsibility’s Economic and Fiscal Outlook for March 2019.

The table shows that the cost of the main bungs to the renewables industry – the Renewables Obligation, Feed-in Tariffs, Contracts for Difference and so on – has now reached £9.6billion a year, or £340 per household. Some of this goes directly on to bills, but a large share is passed on to industrial users, who then claw it back from consumers via higher prices. Either way, you pay.

Constable’s figures are only part of the picture. Vast expenditure is required on upgrades to the electricity grid to accommodate renewables, and a whole lot more needs to be spent on dealing with their intermittency. Not the least of these interventions are so-called ‘constraints payments’, when wind farms (typically in Scotland) are paid to switch off because the grid can’t get the electricity to where it is needed (England). In these circumstances, you pay three times over: once to get the wind farm to switch off, again for the electricity it didn’t produce, and then a third payment is required to get somebody to generate electricity where it is required. It’s fair to say that this is not a cheap intervention. One estimate reckons costs will soon be another billion pounds per year. 

And it’s going to get worse. Reading between the lines of the OBR figures, Constable projects that £9.8billion figure rising to £12billion a year by 2023. With grid costs rising too, the figure could easily reach £500 per household.

It’s worth remembering why we are doing this. It’s certainly not going to make any difference to the Earth’s temperature: our carbon dioxide emissions are a tiny fraction of the global total, and smaller than annual increases in China and India. No, we are doing this as a gesture: a way to show our leadership on climate change, setting an example to the rest of the world.

I hope that sense of national leadership makes you feel better when the time comes to pay the bill.

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Andrew Montford
Andrew Montford
Andrew Montford is Deputy Director of the Global Warming Policy Forum

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