The green Party - A Guest Post

A guest post from Joe Public. Thank you so much Joe.

The “green Party”  - unaware of the costs we would all have to pay for of its polices. [That’s ‘green’ as in 'inexperienced or naive’.]

On 13th September I emailed the Green Party asking "How much our current energy prices are inflated, to absorb the costs of subsidies to wind- and solar- subsidy-farms?”

After three reminders for even an acknowledgement, I finally received an answer on 23rd Oct.

The Greens' response was "About £4” (per year, per household), obtained from the headline of a year-old trade paper ‘Greenwise’ they provided as their source.

As their source was simply a trade magazine reporting a press release from a trade association [Renewable Energy Association (REA)], those of a sceptical nature would rightly be suspicious.

But that trade magazine report also included an addendum to the article which clearly stated "This story was changed at 14.37 on Wednesday October 23 2012 to clarify that renewables added £22 to the average household bill this year already. “

That part-year figure of £22 therefore therefore works out at £27 for a full year. So even at first sight, the Greens’ answer was underestimated by 575% (675% - 100%)

Now it gets interesting.

In fairness to the Greens, at the time of their response to me, I expect they were unaware of the latest press release from REA dated 23rd October 2013 which stated "Renewables policy makes up only 3% of average bills overall and only a third of the Government’s ‘green levies’….”

At March 2013, the ‘average' household energy bill is given as £1,267 on p78 of DECC’s "Estimated impacts of energy and climate change policies on energy prices and bills”

From the above, we can deduce that renewables policies add £38 (3% x £1,267) to bills. Now it appears that the Greens’ answer was underestimated by 850% (950% - 100%)

Now it gets really interesting.

In order to assess the commercial impact of subsidies, I specifically asked "How much our current energy prices are inflated to absorb the costs of subsidies”. The format of the answer provided (irrespective of its accuracy) was …………….. disingenuous. It may or may not factually correct, it is the preferred format of politicians & certain vested interests, but it doesn’t answer the question.

The use of a statement "…. added an extra £xx to household energy bills.” is only part of the picture, because it deliberately understates the true impact of 'green taxes’. 

The “House of Commons Energy and Climate Change Committee "Energy Prices, Profits and Poverty Fifth Report of Session 2013–14” (HoC 5th report) states on p59 that approximately two-thirds of energy costs fall on non-domestic consumers. However, the majority of their costs are then likely to be passed through to domestic consumers through higher prices for services and products. [I’ve included an image below, of part of the relevant para.]

Consequently every household pays both the direct extra cost of the energy, plus the extra cost of those same price rises on all UK goods and services bought in. A £100 increase in ‘household’ bill translates to about £160 increase in household costs, because you & I have to pay to heat and light and power all the factories, shops, pubs, offices, warehouses etc that provide the goods & services we buy in.

This means that the above £38 now becomes about £60. Now it appears that the Greens’ answer was underestimated by 1400% (1500% - 100%)

For Rosie’s Scottish-based readers, it is even worse. For comfort, Scotland & the UK primarily need heating (as opposed to a warm country which needs cooling for comfort). Data in the form of ‘Degree Days’ is used to compare both annual and regional temperatures. From this source I’ve compared 2012 20-year average Degree-Days for the ‘Midlands’ to provide guide to ‘average’ UK conditions, with NE Scotland to represent folk north of the border. You may not be surprised to have it confirmed you need about* 2568/2214 = +16% more heat than the rest of us. 

* There are many variables, and I’ll wager I’ve simplistically underestimated the effect of the northern climate - the greatest being the Degree-Day data is ‘only’ 15.5°C, whilst the CIBSE guide for comfort in living rooms is 21°C. Therefore the northern heating season is much longer than for southern folk.

So £60 now becomes £69. Now it appears that the Greens’ answer was underestimated by 1625% (1725% - 100%)

On 22nd October, Scottish Power was fined £8.5m because its sales agents misled competitors’ customers into switching supplier by (not necessarily deliberately) underestimating

the cost of power from them. I don’t know the relative percentages, but I’d be surprised if their underestimate was greater than 10%.

Political parties have a duty to present facts about their policies which impinge on everyone’s standard-of-living, with a reasonable degree of accuracy.

[I’m human, and collating data which is sometimes deliberately presented in obtuse forms may lead to some error. I’d welcome any reasonable correction or clarification of my method & rationale. ]

And now, what of the future?

The good news is that some politicians have woken up to the fact that the people who elect them are ‘price sensitive’. Some need reminding about the Office of National Statistics report that in winter 2011/12 (December – March) 22,800 people in England alone died from the effects of cold weather – this is a provisional figure, but is similar to figures for previous years. [Sorry, but I haven’t got the figures for Scotland - but they must be proportionately greater because it’s colder.]

The bad news is that HoC 5th report p59 (image below) also warns that whilst "DECC analysis suggests that energy and climate change policies make up approximately 9% (around £112) of the average annual dual fuel bill. However this is set to rise sharply in future years, with costs falling largely on the wholesale electricity price. DECC estimates that its policies will add (up) to 33% to the average electricity price paid by UK households in 2020 and 41% in 2030.” (my bold & underlining)

click to enlarge

Editor's Note: Apologies if the fonts vary on this post for some readers.  Unfortunately I can't fix it.

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