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False claims on low-carbon energy are damaging UK

March 24, 2017

By Paul Homewood

 

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http://www.telegraph.co.uk/business/2017/03/23/false-claims-low-carbon-energy-damaging-uk/

 

From the Telegraph:

The Committee on Climate Change was established by the 2008 Climate Change Act to act as the climate policy equivalent of the Bank of England’s monetary policy committee. Ministers and Parliament are required by law to rely on its advice. Arguably this role gives the committee more influence over Britain’s long-term prosperity than anyone else. A public body, funded by the taxpayer to the tune of £3.8m a year, discharging such a crucial role requires competence, honesty and objectivity.

The committee’s recent report on energy prices is deficient in all three, instead displaying similar ethical standards to Greenpeace or Friends of the Earth. Yes, low carbon electricity is more expensive than burning fossil fuels, the report conceded, but overall, low carbon policies were making people better off because energy efficiency policies meant that people were consuming less electricity.

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Low carbon policies are making people better off because energy efficiency policies mean they consume less electricity

That might come as news to people shelling out for LED lighting, as the report assumes investment in energy efficiency costs nothing, and it recycles a claim made by the disgraced energy and climate change secretary, Chris Huhne. As Peter Lilley wrote last year, this was a graver distortion of the truth than the dishonesty over who was driving a speeding car that landed Huhne in jail. It now forms the centrepiece of the climate committee’s spin that meeting Britain’s emissions cuts is not costing consumers a penny because the cost of green policies is more than offset by energy efficiency. But, as Lilley showed, it ignores the fact that industry bears two thirds of the cost of low carbon policies, with all that means for jobs, living standards and exports.

The climate committee’s report attempts to rebut this. British firms do pay more for electricity than virtually all their overseas competitors, the committee concedes. However, it claims the culprit is not green policies, but wholesale and network costs. Lord Deben, the Tory peer who chairs the committee, claims to be baffled. Even though other European countries have similar low-carbon policies, industrial electricity prices in Britain are higher, “and that is not the result of green measures.” He gets “pretty annoyed” when power utilities claim otherwise.

Tony Blair

Tony Blair set tough targets on green energy Credit: PA

But Deben’s claim is demonstrably false. Contrary to what the Committee on Climate Change asserts, Britain’s decarbonisation policies are not the same as other European countries. They are much more aggressive. When, in 2007, Germany proposed the EU adopt renewable energy targets, to the horror of the Treasury and Alistair Darling’s Department of Trade and Industry, Tony Blair gave Britain the most aggressive wind and solar targets of any member state. With Blair gone, Gordon Brown’s government rejected proposals for a unilateral carbon price floor. The idea was to prop up the price of carbon allowances credits under the EU’s Emissions Trading Scheme. This sensible approach was abandoned by the Coalition government. To show climate leadership, the Coalition Agreement promised a carbon price floor, which duly came in George Osborne’s 2011 budget. It was criticised by the energy committee, which argued in 2012 that unless the price of carbon was increased across the EU, “taking action on our own will have no overall effect on emissions other than to outsource them.”

Of the £1.9bn the Treasury is raising this year from the climate change levy, around three quarters comes from the carbon price floor at £18 per tonne and the rest from auctioning off new emissions allowances at around £5.20 a tonne.

In fact, the impact of the carbon price floor on electricity costs is greater than the sums reaped by the Exchequer, as it gives investors in low-carbon capacity, especially nuclear, the ability to price up to the floor. Rather like airport duty-free shops, it turns them into quasi-tax collectors lining their own pockets.

coal power plant

In 2015 the ‘Big Six’s’ gas and coal-fired power stations racked up £405m in operating losses Credit: PA

This huge annual windfall helps explain how in 2015 the owners of Britain’s nuclear power stations collected £994m in operating profits. Over the same period, the Big Six’s gas and coal-fired power stations, which generated 65pc more electricity than nuclear, racked up £405m in operating losses. The carbon price floor is the principle reason why coal generation, Britain’s cheapest source of electricity, is being forced off the grid, even though Germany expects to keep operating its coal-fired power stations until 2040.

Driving down energy consumption and pushing up high-fixed-cost generating capacity is a formula for ever-rising electricity prices. Between 2013 and 2015, the price of fossil fuels used by the Big Six to generate a megawatt hour (MWh) of electricity fell by 20.1pc. Network costs rose by 9.8pc and green and other government levies rose by a whopping 26.6pc per MWh of electricity supplied by the Big Six. While the rest of the world enjoyed the benefits of plunging fossil fuel prices, electricity prices in the UK rose by 4.2pc. This is not the fault of the Big Six. The blame rests fairly and squarely on government policies.

Dismissing industry’s concerns about the impact on competitiveness and trade, the Committee on Climate Change’s answer to manufacturers and exporters is worthy of Marie Antoinette: Let them eat energy efficiency. If Britain is to continue down this road to ruin, at least it should be done in full knowledge of the economic and social consequences and not on falsehoods pumped out by the Committee on Climate Change.

Rupert Darwall is co-author of a forthcoming Civitas paper on the Government’s industrial strategy

http://www.telegraph.co.uk/business/2017/03/23/false-claims-low-carbon-energy-damaging-uk/

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24 Comments
  1. bea permalink
    March 24, 2017 10:59 am

    He read a little history at Cambridge, while full-time worming his way onto the Conservative Party gravy train. Of course he is baffled by anything which requires rigorous thinking and integrity.

    • March 24, 2017 11:47 am

      You mean as described brilliantly in Nassim Taleb’s “Intellectual Yet Idiot?”

      • bea permalink
        March 24, 2017 12:14 pm

        Deben is, I think. just “idiot.”

        Taleb sets up his own shibboleths* at the end of that article.

        *In the old sense

    • AlecM permalink
      March 24, 2017 11:47 am

      The name of this man tells all: the Deben is a river in Suffolk. So he took Deben as his HoL pseudonym.

      In reality when Environment Minister he used his daughter as a sink for a hamburger to ‘prove’ vCJD was not a major risk and joined GLOBE, the UN organisation which oversees sustainable development.

      Unfortunately for us, his level of scientific knowledge is so low that he is incapable of making reasoned decisions in both areas. Let’s hope he is soon culled when the HoL is modernised.

      • bea permalink
        March 24, 2017 12:19 pm

        Nobody would have minded if he had eaten the hamburger himself, as a gesture. But you do not take advantage of innocence

      • bea permalink
        March 24, 2017 12:23 pm

        “…HoL is modernised.”

        Do you think we could, as part of the Brexit negotiations, trade them as a job- lot to Europe – (mis-)described as “venerable elder statesmen”?

      • Gerry, England permalink
        March 24, 2017 1:57 pm

        But he did have connections with the renewable industry so that must have made him knowledgeable and impartial. Not!

  2. bea permalink
    March 24, 2017 11:20 am

    BY ‘he’ I mean John Gummer aka ‘Lord’ Deben, the Chairman of the execrable organization in question.

  3. Dave Ward permalink
    March 24, 2017 11:22 am

    “But overall, low carbon policies were making people better off because energy efficiency policies meant that people were consuming less electricity”

    This is exactly the claim trotted out with monotonous regularity by Pierre Gosselin’s resident green troll “sod”. The fact that most of those reductions were because consumers had little choice, in the face of rising bills, is completely lost on the greens…

    They really are evil personified.

    • bea permalink
      March 24, 2017 11:44 am

      Who can forget the image of John Gummer forcing his small daughter to eat a hamburger in public to support a government dogma that it was IMPOSSIBLE to catch CJD that way. Turned out it WAS possible*.

      That affair was also an example of wild dogmatising on the OTHER, supposedly scientific, side. We Brits were going to die in our millions and serve us right! Long after the epidemic had dwindled away, those moment-of-fame-experts were still wistfully trying to freeze our blood with absurd warnings of “it is not over yet!”

      *but very unlikely.

  4. Roger B permalink
    March 24, 2017 1:16 pm

    Slightly off topic: I believe there was a post a little while ago regarding a Pacific island that had apparently gone completely green with batteries, solar, wind etc. The post had a link to the actual project contract which included a set of diesel generators.
    Does anyone else recall this and can link me to it?

  5. Ex-expat Colin permalink
    March 24, 2017 1:33 pm

    yep..you can consume less energy until the point whereby you can’t. Regularly, the supplier cranks up the costs..playing with tariffs that swap about unit price and meter standing charges. Smart meters don’t show that….

  6. Gerry, England permalink
    March 24, 2017 2:00 pm

    Good work, Mr Darwall. Head and shoulders above some of the other drivel the Telegraph puts out. It is also good work from Civitas to make up for the Brexit drivel they have just put out. It does look like a superstorm brewing with our energy supply getting worse as Brexit comes to pass.

  7. Athelstan permalink
    March 24, 2017 3:31 pm

    The Committee on Climate Change was established by the 2008 Climate Change Act to act as the climate policy equivalent of the Bank of England’s monetary policy committee.

    and then:

    A public body, funded by the taxpayer to the tune of £3.8m a year, discharging such a crucial role requires competence, honesty and objectivity.

    “such a crucial role requires competence, honesty and objectivity.”

    I am of the firm opinion that, the very idea of even contemplating responsibility towards any ‘competence’ – can never enter into an MP’s mind such is the utter sub bog standard of 99% of our current ‘representatives’.

    “honesty” –

    rarely sets its feet in the HoC building and would not be a welcome visitor for the members even, if it did happen to stray inside.

    “objectivity”

    Cripes, the foundational excuse, the very raison d’etre of the CoCC is to trash the country via the vehicle of the green agenda – is it not? All [joolya and careen? ha, ha, ha, ha!!!] – who sit on this committee are undiminished, unapologetic, insanely fanatical believers in the great green scam.

    whose kiddin’ who here?

  8. March 24, 2017 4:54 pm

    Don’t forget that you can let the government know what you think about its energy policy by responding to pillar 7 of this consultation: https://www.gov.uk/government/consultations/building-our-industrial-strategy

    • Joe Public permalink
      March 24, 2017 5:45 pm

      Thanks for the heads-up, Philip.

  9. March 25, 2017 10:15 am

    Reblogged this on ajmarciniak.

  10. chrism56 permalink
    March 28, 2017 6:11 am

    This report just out about South Australia power cut – takehome is it was the windfarms that did it.
    http://www.aemo.com.au/-/media/Files/Electricity/NEM/Market_Notices_and_Events/Power_System_Incident_Reports/2017/Integrated-Final-Report-SA-Black-System-28-September-2016.pdf

  11. William permalink
    March 28, 2017 8:31 pm

    This report says that aggregate profits of the large energy suppliers was about £2.5bn in 2015. How does a £405m “operating loss” fit into that and where does the number come from?

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