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The Truth About Davey’s Energy Savings

December 26, 2014

By Paul Homewood  

 

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Ed Davey has been stung into defending his disastrous energy policies, following revelations that his department had disgracefully attempted to hide data, showing that electricity prices would soon be 40% higher, as a result of climate policies.

The above letter was published in last week’s Sunday Telegraph. Unfortunately, he is being rather economical with the truth.

 

First, let’s recap on the energy savings which Davey says will make us so much better off. The table below is from the data that DECC tried to hide.

 

image

https://www.gov.uk/government/publications/estimated-impacts-of-energy-and-climate-change-policies-on-energy-prices-and-bills-2014

 

The so-called savings are listed under 2).

 

 

1) Green Deal and Energy Company Obligation

The original Green Deal involved the government lending people money to make their houses more energy efficient. Naturally, this money had to be paid back, thus negating much of the energy saving. DECC’s table makes no allowance for this.

Because of a low take up of this, the latest version of the Green Deal actually gives money away. But, of course, this money has to be paid for by somebody, and that somebody is the taxpayer. Again, this cost is not reflected anywhere in Davey’s calculations.

As for the Energy Company Obligation, or ECO, this is the system whereby energy companies must offer to pay for insulation. However, this offer only applies to people on benefits, such as Pension Credit and Income Support. The vast majority of the population don’t qualify for the ECO, and many who do will have already paid for insulation at some time in the past.

 

2) Smart Meters

These have not even been rolled out yet. The logic is that we will all use less energy, when we see what it is costing us.

This seems to assume we are all stupid, and are not already capable of turning thermostats down and lights off. It appears highly unlikely that smart meters will make any significant difference, given that many people are already being forced into cutting back on energy use because of high prices.

 

3) Historic Energy Efficiency & Products Policies

It may be the case that products generally have become more energy efficient over the years. This normally happens anyway, under the free market.

Think, for instance, of cars. Twenty years ago, we would have been lucky to get 30 mpg, whereas now we expect twice as much. This technological progress did not happen because governments decreed it, but because of free market competition.

In any event, much of the saving currently being claimed by DECC relates to twisty light bulbs. The Energy Saving Trust estimates that low energy lighting can save households maybe £40 pa. However, we know that these bulbs are considerably more expensive than conventional ones, and again this extra cost is not factored into the DECC calculations.

Similarly, if manufacturers are forced to produce more energy efficient appliances, then there may be cost implications here too.

 

4) Building Regulations

Building Regulations now lay down that new homes, extensions and conversions are now built to meet higher standards of energy efficiency. As with the other items discussed though, this comes at a cost, which again has not been taken into account.

But, more importantly, the vast majority of the population are not living in new houses, or are likely to be in the foreseeable future. For them, there will be no saving at all.

 

 

 

Conclusions

The bulk of the “savings” claimed by DECC are not available to the vast majority of the population, who will be much worse off as a result of higher energy prices. Even the small savings they do make may be largely offset by higher costs

20 Comments
  1. December 26, 2014 2:12 pm

    Davey’s greatest deception is basing the table on “Household Energy Bills”.

    As you’ve highlighted in the past, Paul, households also pick up the tab for all of Industries’ extra energy costs except for the small proportion they manage to ‘export’

  2. manicbeancounter permalink
    December 26, 2014 3:00 pm

    Reblogged this on ManicBeancounter and commented:
    Ed Davey’s claim that the DECC published “a complete picture of everything that affects final energy bills” is refuted by Paul Homewood below.
    This is far from an exhaustive list. For instance there are also the costs of upgrading the National Grid to transport the generated the electricity generated in remote wind turbines to the centers of population; and the impact on jobs and growth of increasing energy costs relative to other nations.

  3. December 26, 2014 3:01 pm

    More about disingenuous Davey’s deliberate deception:

    From the same spreadsheet that includes the impact upon ‘Household’ bills, are further tabs for businesses and “Large Energy Users”.

    For the latter, DECC’s worked example uses one whose electricity bill is £5,852,848.

    They then calculate the estimated average impact of energy and climate change policies on energy bills paid by large energy intensive industrial users that benefit from ALL support measures – showing a RISE by 2020 of £842,640. (+14%)

    HOWVER, if that business cannot / does not benefit from ANY support measures, its electricity bill will RISE by £3,840,802. (+65%)

    In reality, all such businesses will be somewhere between those two extremes.

    Remember folks, UK citizens will pick up the tab for perhaps 90% of all increases.

    • December 26, 2014 3:02 pm

      And those that get support are simply funded by taxpayers

      • manicbeancounter permalink
        December 26, 2014 3:20 pm

        Further, to get the support requires additional costs to business in applying for the money, monitoring energy usage and maintaining complex systems. Given that many of the measures require large investment, with long-term savings, businesses operating in competitive and uncertain areas would find the necessary investments not worthwhile.

      • December 26, 2014 7:31 pm

        So, we have non-productive civil servants employed to create costs to industry, and, additional non-productive civil servants employed to mitigate those costs to industry.

        We really are governed by fools of the highest order.

  4. catweazle666 permalink
    December 26, 2014 11:55 pm

    My wife finds our Owl electricity monitor very useful.

    When the reading drops back to normal it tells her the washing machine has finished so she doesn’t have to go to the utility room to check.

    Apart from that…

  5. Brian H permalink
    December 27, 2014 7:16 am

    “Not reflected in prices” … there’s the fundamental falsehood.

  6. Derek Buxton permalink
    December 27, 2014 10:13 am

    It is a strange attitude defect in all limp-dims, they lie. One may say that they are serial liars. I challenged my MP, Limp-dim, naturally about the “green deal” and his reply just dismissed the fact that the payments were going onto the bills.mart Meterss
    As to “smart meters”, the obvious use for these is to cut off the supply when our elite decides we have had enough.
    .

    • Derek Buxton permalink
      December 27, 2014 10:15 am

      It is a strange attitude defect in all limp-dims, they lie. One may say that they are serial liars. I challenged my MP, Limp-dim, naturally about the “green deal” and his reply just dismissed the fact that the payments were going onto the bills.
      As to “smart meters”, the obvious use for these is to cut off the supply when our elite decides we have had enough.
      .

  7. December 27, 2014 3:07 pm

    Reblogged this on Tallbloke's Talkshop and commented:
    .
    .
    Paul Homewood eviscerates Ed Davey’s latest attempt to explain away his utter incompetence as an energy minister.

  8. December 27, 2014 3:40 pm

    Reblogged this on Centinel2012 and commented:
    Most of the saving from reduced energy usage have already been realized and any additional benefits are not economically justified even at higher prices. If you have a car that gets 40 MPG and you drive 5,000 miles per year buying a car that gets 50 MPG will only save you 100 gals. At $10 dollars per gal you save only $1,000 so if you keep the car for 5 years you save $5,000 and if the car costs more than $5,000 more than a car that gets 40 MPG then its not worth it. the same logic applies to all uses of energy and after decades of looking at reduced energy the additional sames are now minimal — unless you give up performance!

  9. TerryS permalink
    December 27, 2014 5:04 pm

    So how much less electricity are we using after a decade of energy savings measures?

    OFGEM use something called Typical Domestic Consumption Values (TDCV) which they split into 3 sections for low, medium and high usage households.

    In 2003 the figures were:

    Low: 1,650 kWh
    Medium: 3,300 kWh
    High: 4,600 kWh

    In 2013 the figures changed to:

    Low: 2,000 kWh
    Medium: 3,200 kWh
    High: 4,900 kWh

    After a decade of energy saving measures low usage households are using 21% more, medium are using 3% less and high usage are using 6% more.

    Assuming each of the low, medium and high cover 1/3 of households then overall household electricity usage has increased by 6%.

    Source:
    Decision for new typical domestic consumption values (2010) (Has the 2003 figures).
    Decision for new typical domestic consumption values (2013)

  10. Kon Dealer permalink
    December 27, 2014 7:12 pm

    What this shows is that educational standards are slipping.
    Believe it or not Edward Jonathan (call me “Ed”) Davey graduated with first class honours, from Oxford, in Philosophy, Politics and Economics.
    The only “economics” Ed seems any good at is being “economical with the truth”.

  11. Doug Proctor permalink
    December 28, 2014 12:37 am

    Davey is saying that despite paying more per unit, you will be using less units, the net effect is less cost. If that were so, there would be no need for all the fancy tax and subsidy dance steps. (In fact, without the dance steps, there would be no need for all the governmental adminstrative effort of monitoring and compliance, and costs would be even lower.)

    Green energy is supposed to be cost-competitive. But it is not – unless you consider imposed subsidies or penalties to be part of normal “costs”. Which any free-market economist wouldn’t.

    Davey is of the extreme socialist, near-Russian communist belief that a central, wise government’s job is to determine the entire cost of society, then determine the relative value of all aspects of society, and then redistribute the total society’s costs amongst those aspects so-as to encourage some (the ones the philosophers say are “good”) and discourage others (the ones the philosophers say are “bad”). He does not believe a well-regulated, educated social body has the capacity to determine the good bits and the bad bits by itself, nor to instruct its elected governors to restrict and support causes based on what it tells them. Davey is an elitist of the old school, from the place where the aristocracy knows what is in the best interest of the commoners based on the aritocracy’s sense of what works and doesn’t work according to their bottom line.

    Just in case you are wondering, this is not a smack against the Brits: America (and Canada, where Iive) have the same elite vs the others problem. Britain merely has an historical basis for what in North America the last fifty years of economic “progress” has wrought.

    • TerryS permalink
      December 28, 2014 8:57 am

      Davey is saying that despite paying more per unit, you will be using less units,

      Except households aren’t using less units. they are using more. See my previous comment.

      According to Ed Davey’s DECC we are using less energy per person but the disparity between an increase in household usage and a decrease in personal usage is explained by the fact that the UK’s population has increased by 8% over the ten year period without a similar increase in housing stock so there are more people per household.

  12. Bloke down the pub permalink
    December 29, 2014 10:56 am

    From where I went for a walk this morning, I could see the Ecotricity wind turbine at Nympsfield. It’s an amazing piece of kit, there wasn’t a breath of wind yet it was whirling around like there was no tomorrow.

    • Kon Dealer permalink
      December 29, 2014 11:35 am

      That’s because it is using (fossil fuel produced) electricity to keep it spinning to protect its bearings from damage.
      Yet another hidden cost of “green” energy.

  13. January 2, 2015 8:19 pm

    Several replies in the letters page 28th Dec:
    here are two. The first is a gem. Mine rather less so.

    SIR –
    Having spent my whole working life within the electricity supply
    industry, I found it hard to believe how little the author of the
    letter headlined “Cost of going green” seemed to understand of how an
    electricity supply system works.
    All was explained when I saw that it was written by Ed Davey.

    Bernard Longstaff
    Cheddar, Somerset

    SIR –
    Mr Davey’s assurances on energy costs remind me a little of “Comical
    Ali”, the former Iraqi minister of information, who assured
    journalists that the Americans had been driven back even as their
    tanks were entering Baghdad.

    Rev Philip Foster
    Hemingford Abbots,
    Huntingdonshire

  14. cornwallwindwatch permalink
    January 5, 2015 4:04 pm

    Reblogged this on Cornwall Wind Watch.

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