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Climate Policies Now Account For 35% Of Electricity Bills

November 11, 2017

By Paul Homewood

h/t Mark Rogers

 

Mark came across this chart on the website of LSI Energy, a company involved in energy procurement and management:

 

image

http://lsienergynews.com/1B3D-59WGC-03OIW3HL9E/cr.aspx

 

It tells us that environmental costs (RO, FIT, CfD, CM and CCL) now account for 35% of electricity prices.

According to BEIS figures, domestic users consume 108 TWh a year, which based on 26.7 million households works out at 4000 KWh.

I pay 13.2p/KWh for my electricity, including standing charges, so the average annual bill must be around £528. Environmental costs would therefore account for £185pa.

 

OBR figures suggest a cost of £10.1bn this year, which on a pro-rata basis work out at £132 per household.

Either way, bills are set to rise higher, as LSI note:

Contributing to the rise of non-commodity costs is Renewables Obligations, which are set to continue to rise significantly between now and 2020. It is also estimated that there will be a steep rise for FiT Contracts for Difference (CfD), which will contribute to the increase in non-commodity costs.

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18 Comments leave one →
  1. Bloke down the pub permalink
    November 11, 2017 12:02 pm

    Every bill sent to every household should have a breakdown of the costs based on these figures. Once the public saw where their money was going to, there would be the pressure to change the system.

    • A C Osborn permalink
      November 11, 2017 1:22 pm

      I totally agree.
      But then again it is a pretty cheap price to pay to “Save The Planet”. /scarc off

  2. Robert Fairless permalink
    November 11, 2017 1:29 pm

    All of it is an exercise in futility. The entire government policy is a folly beyond measure based on fraudulent or dubious science and propagated with a religious fervour.
    The poor tax paying citizen is forced to pay the fraudulent bill regardless of ability to pay.
    If there were any justice in the world, the Climate Change Act 2008 would be scrapped forthwith and the huge bureaucracy which it has generated made redundant.

  3. November 11, 2017 1:37 pm

    What is the cost of actually generating electricity. There must be some reasonable estimate of the cost – capital, maintenance, fuel ( if needed ) – for each generating technology.

    Obviously Scottish pre-2000 hydro will be the cheapest ( even tho’. we subsidise it ).

    But what about present gas, present nuclear, present onshore and offshore wind, and present solar.

    Gas, nuclear and half of Scottish Hydro are not subsidised. So the rest get the market price plus the subsidy sum for each technology.

    We should see where the subsidy is going to see what bang we are getting for each buck.

    • daver permalink
      November 11, 2017 3:05 pm

      UK gubbernment and Hydro long ago decided to join the consumer carve-up. Quote:

      ‘During consultation on New Labour’s renewable energy policy and the Renewables Obligation, which ran from March 1999 to March 2001, government and stakeholders alike agreed that existing large hydro-power stations should, as a mature and profitable technology, be excluded from the subsidies regime.

      However, after consultation closed, hydro generators pressed the government to reverse its decision, citing ageing plant and poor trading conditions.

      Two major changes were subsequently made to the regulations, both of benefit exclusively to large generators.The first, which eased the qualification criteria for subsidies to include all hydro-power stations under 20 MW, was made public.

      The second, which was all-but hidden from public view and did not generally come to light until 2004, brought an even larger portion of the UK’s hydro portfolio into the scheme. It authorised owners to cut the capacity of turbines to bring them below the declared qualification limit.

      As a result, since the Renewables Obligation schemes became operational, UK hydro-generation capacity has gone down, not up, for the first time in the technology’s 100-year history.’

      Source: http://www.templar.co.uk/downloads/Subsidies_and_Subterfuge.pdf

      • November 11, 2017 4:11 pm

        daver.
        I am well aware of Dave Bruce’s remarkable document and disclosure that you refer to.
        It was on the back of ‘Subsidies and Subterfuge’ that I – with Dave’s agreement – put in a Petition No. 2088 to the Scottish Parliament in 2008. I was never called to speak to it and the Petitions Committee never passed it to the proper Committee to take forward.

        Earlier this year I managed, after a real struggle, to get Ofgem to release the total number of ROCs that have now been issued to the Accredited hydro stations that Dave Bruce fingered,

        Their total value will be in excess on £1 billion.

        For what is the cheapest generated electricity in GB.

        I have spent the years since 2009 trying to interest Scottish politicians of all parties – even the Greens – in this scandal but none is interested.

        I asked Struan Stevenson to approach the SSE and Scottish Power and ask them what was the cost of generating electricity from their pre 2000 hydro plants. He failed to get a response and gave up.

        I recently ‘ challenged ‘ Mr Lindhurst, the Tory convenor of the Scottish Parliament’s energy committee to do the same but he has ignored this challenge.
        So over the next decade SSE, Scottish Power and the new owners of Kinlochleven will collect another £1billion pounds in Subsidy for electricity that is produced by hydro stations that are between 50 and 100 years old.

      • HotScot permalink
        November 11, 2017 5:21 pm

        Nick

        that’s a lot of work. You are due some thanks from all of us.

        Thank you mate.

      • daver permalink
        November 12, 2017 2:02 am

        Thanks N, for near confirmation. Scottish electrical energy policy currently is a self-induced basket case wherein demand is increasingly reliant upon southern connectors. Scottish Gov has some policy – no nuclear after Hunterston and Torness by 2030.

        Inevitably, Holyrood decisions essentially yoke Scotland towards increasing imports. This from a government that wants oh so badly to be seen as ‘green’ and ‘independen’ just to become inclusive within EU.

        One thing’s for sure – former Scottish pragmatism has long since been supplanted towards subsidisation and with it, energy security.

    • November 11, 2017 9:25 pm

      @Nick Decker: RE: Subsidies

      Two subsidy values are most relevant. Total Subsidies by fuel or generation source and Subsidies per unit of power generation.

      In terms of the latter, essence, it breaks down to this:

      In 2007, US EIA data reported the following subsidies per MW of generated electricity in USD

      Solar $24.34
      Wind $ 23.37
      Nuclear $1.59
      Oil/Gas $ 0.25
      Coal $ 0.44

      In 2014, solar subsidies reached $775.64 / MWh.

      References below are US specific, not UK specific. That said, the relative scale ought be reasonably close. If anything UK / EU subsidies are most likely larger.

      Please See
      https://www.mercatus.org/publication/renewable-energy-subsidies-and-electricity-generation

      http://dailycaller.com/2015/12/02/solar-gets-326-times-more-subsides-than-coal-oil-and-natural-gas/

      http://instituteforenergyresearch.org/analysis/eia-releases-new-subsidy-report-subsidies-for-renewables-increase-186-percent/

      hope this helps.

      • November 11, 2017 9:25 pm

        oops. Dekker. my mistake. My Apologies. 🙂

      • John F. Hultquist permalink
        November 12, 2017 6:44 am

        If a green energy project gets millions of dollars from a government and than goes bankrupt and leaves a site a toxic mess of carcinogens, broken glass and contaminated water …

        Abound Solar – Longmont, Colorado

        … where does this money get accounted for in the cost of subsidized electricity?

        Never mind. Just an idle thought.

  4. Gerry, England permalink
    November 11, 2017 5:52 pm

    The Blue Labour energy cap may well smoke some of this out if the Big Six (or maybe 5) choose to tell the truth on why prices increase despite wholesale costs decreasing.

  5. November 11, 2017 10:01 pm

    The “800 Pound Gorilla” that nobody seems to be speaking about is/are Voltage Collapse and Frequency instability on the Mains. These 2 factors can totally crash the Grid in a matter of seconds. Subsidies are not the focus during a grid collapse. South Australia found that out the hard way. in 12 seconds.

    http://joannenova.com.au/2016/10/sa-blackout-three-towers-six-windfarms-and-12-seconds/

    Synchronous / thermal generation is the backbone of a stable grid. The surging generation from wind becomes a larger factor as more wind power is placed on line. SA experienced ramping of some 200 MW/hr in wind energy swings. This plays havoc with the thermal generation which are expected to ramp up and down to compensate for the variations. Unfortunately, only Gas Turbines can ramp at that rate. Coal and Nuclear plants cannot ramp that quickly and are not designed to do so. Nuclear plants wish to operate at 90% + capacity at all times. Coal plants wish to operate at no less than 50% capacity and preferably at 80% + capacity.

    With the coal plant closures in the UK and AU, both are likely to see one or more major blackouts come Jan 2018. UK during cold weather and SA during hot weather. Too much thermal generation has been taken off line. The reserve power to handle surging during gusty winds or loss of wind power during calm days is going to play havoc with both grids.

    Methinks the UK and AU are going to get a major “slap” from reality in January. I hope not, but the margin for error is essentially zero at this point for either grid.

    • daver permalink
      November 12, 2017 2:13 am

      Scotland’s gunning for the inevitable collapse. Like some folks down SA and V way etc, it’s only a matter of timing …

      • November 12, 2017 5:50 am

        daver. Were I in the UK or AU, it would be most interesting to publicly see the “black start” plans that “must” be on file at the National Grid level. In them, there ought to be several load flow analyses of precisely how one restarts a grid after a complete failure. The only way to do such a restart involves disconnecting all grid voltages above about 11 Kv so that the residential grid can be first started on a quadranted basis because they possess resistive loads. The industrial grid is mostly motor loads and cannot be energized until after enough synchronous systems are in parallel. The large inductive loads are the issue. None of the wind/solar sources can connect until after the synchronous grid is on line. Please do ask how the grid operator believes it possible to recover from a black start situation. As well, who will be held accountable for industrial and private losses from such a preventable disaster. In the present condition, the UK and AU, will have to face this no later than mid January when the grid is at peak demand. Someone in responsible position ought have such a plan at the ready. If not, they don’t deserve to sit in such a position. The margin of reserve thermal generation is insufficient to withstand the predictable loss of wind generation at peak demand in January. Hope I’m wrong, but fear I’m right.

  6. November 12, 2017 6:09 am

    Apparently, HRH Prince Charles has a vested interest in the energy market. Hmm.

    Biogas: http://www.telegraph.co.uk/news/uknews/prince-charles/9685113/Prince-Charles-takes-on-energy-giants-with-biogas-plant.html

    AU has a similar conflict, absent HRH: https://www.theguardian.com/news/2017/nov/08/coal-fired-plant-shifted-1bn-offshore-while-pocketing-117m-from-australian-taxpayers

    I’m uncertain of the veracity of either publication. Might anyone shed light on that?

  7. daver permalink
    November 12, 2017 7:24 am

    Cowboy79, whilst I’m no power engineer I somewhat get Scotland’s looming electricity problem. Come mid/late 2020’s once we’ve lost both nuclears we’ll become utterly reliant on imports. Between Scotland’s current cross-party zero-nuc policy, EU mandated LCPD adherence and utterly ridiculous de-carbonisation targets (see recent reevaluation towards 90% by 2050) there’s no doubt we’re relinquishing energy supply and security. And this from a government that seeks ‘independence’ to then jump back into bed as a fledged EU component.

    It’s a big world out there but the blinkers here are most certainly on – all in the name of political expediency.

  8. daver permalink
    November 12, 2017 7:52 am

    Good on you, Nick D and mare self-sufficient power to your elbae.

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