Electricity Prices To Skyrocket
By Paul Homewood
I ran a post a few weeks ago on the Report of the Energy & Climate Change Committee, “Energy Prices, Profits and Poverty”. The Report warned of large hikes in electricity bills looming as a consequence of climate change policies.
Tucked away on Page 59 was a bit more detail, which I reproduce below.
So, to highlight:
1) Environmental charges already account for 11% on electricity bills, and 9% of dual gas/electric ones.
2) These amounts are set to rise sharply in future years.
3) By 2020, environmental charges will account for 33% of electricity bills, and 41% by 2030.
4) This increase will particularly impact electric only households (often fuel-poor).
5) Although two thirds of the extra cost would fall on non-domestic users, these costs would still find their way to domestic users, through higher prices for goods and services [not least higher taxes, as government running costs rise!]
6) These extra costs could also impact on the competitiveness of UK exports.
I would also make three other points:
1) Government policy also calls for a massive decarbonisation of domestic heating and transport. The huge increases in electricity prices, now in the pipeline, will make the electric alternatives relatively much more expensive.
2) According to the Select Committee’s Report, energy company profits are under 5%, i.e much less than the current environmental costs.
3) The projected increases do not include the effect of higher wholesale prices. Apart from other factors, the switch from cheap coal to more expensive alternatives will lead to higher wholesale costs, and therefore higher retail prices still.
All in all, a rather sorry mess.