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Ofgem condemned for misleading the public about energy price rises

February 5, 2021

By Paul Homewood

 

 

From GWPF:

 

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Ofgem has claimed the 9% rise in energy bills for millions of British households is primarily a reflection of the rise in wholesale costs, and suggested that consumers should “shop around” for a cheaper supplier.

In reality, wholesale costs account for only about 33% of electricity bills, with two-thirds of the very high costs of UK electricity due to subsidies for renewables investors and other socialised costs. Cost increases are mostly due to these parts of the bill; 

1. The cost of renewable energy levies are expected by the OBR to rise from £9.6 billion in 20/21 to to £10.2 billion in 2022/23, not including the FiT costs. Together they account for about 40% of the bill.

2. Transmission and Distribution charges (and losses) are also heavily affected by climate policy and account for about 20% of the bill.

3. ‘System balancing’ costs alone were £2 billion last year, up from £1.5 billion in the previous year, with much of that increase due to the presence of inflexible and uncontrollable renewables. The bulk of that additional £500 million has been deferred to this coming year, and accounting for a substantial part of the increase that Mr Brearley is blaming on “wholesale” costs.

Mr Brearley’s suggestion that customers “switch” to get a cheaper tariff is therefore nonsensical. Climate policy and system costs account for the majority of the bill, and these apply equally to all suppliers, meaning that there can be little to choose between them, and switching can have no significant effect.

To blame “the market” for what is effectively a manifest failure of ever more expensive Net Zero policies is an attempt to deflect attention from the true culprits behind rising energy poverty. If Mr Brearley and Ofgem really wanted to do something for hard-pressed consumers they would tackle the ballooning effect of climate policies.” GWPF director Benny Peiser said.

“Boris Johnson and his government are risking their political survival if they continue to push up the cost of energy, driving millions of British households into energy poverty,” Peiser warned.

22 Comments
  1. Thomas Carr permalink
    February 5, 2021 6:23 pm

    Well done . This particular boil needs to be lanced especially the cost to consumers of having to pay wind generators the cost of refusing their supply and the cost of systems/installations to cope with the fragile supplies — system ballancing.
    It would be nice to see a graph of the movement in net and gross prices since 2000 the net being the 33% you mention. Nothing like graphics to get the editors to pay attention even if the House of Commons find it a bit like hard work.

  2. Penda100 permalink
    February 5, 2021 6:35 pm

    And on top of the extra energy costs Boris is reported as wanting to put a carbon tax on meat and dairy. Utter insanity and another example of those whom the Gods wish to destroy they first make mad. OT there’s another report in today’s DT that Covid is due to Climate Change. Remarkable what CO2 molecules can achieve.

    • February 5, 2021 6:55 pm

      Boris hasn’t any such plans.

      • buxtond permalink
        February 5, 2021 9:22 pm

        And are you sure just whart the idiot Boris, will do? He has already destroyed our Country. He is not a fit and proper Leader, of anything.

      • Mack permalink
        February 5, 2021 10:56 pm

        David Guy-Johnson: I think you might find, yes he has. His chancellor is already asking all government departments to assess where ‘carbon taxes’ might be raised. Farmers seem to be particularly vulnerable.

      • I don't believe it! permalink
        February 6, 2021 12:26 am

        So who suggested it then (it wasn’t just meat and diary, it included gas)!

      • February 6, 2021 8:29 am

        David,

        doesn’t the lady with whom he shares number ten Downing street have such plans, and many more?

      • Chaswarnertoo permalink
        February 6, 2021 12:32 pm

        77th?

    • Phoenix44 permalink
      February 6, 2021 9:30 am

      If we are to have a tax then let’s have a proper carbon tax – simple and charged on all usage of carbon. The revenue should then be balanced by tax cuts elsewhere.

      That would then have two effects. First, if it makes say meat and dairy more expensive then farmers will find ways to reduce emissions and/or cut other costs. That’s a much better outcome than bans or arbitrary taxation. Second, it will demonstrate whether all the claims made by Greens are true because all farming, all manufacturing – including wind turbines, solar panels and EVs – will be paying the same tax.

      Greens hate proper carbon taxes because they don’t allow them to exercise their prejudices and they do allow market forces to make stuff Greens hate more effecient. They also expose the fradulent claims made by Greens about emissions in supply and manufacturing chains.

      Anything Greens hate we should support.

  3. GeoffB permalink
    February 5, 2021 7:15 pm

    Jonathan Brierley, OFGEM head blames bad debts, when its all down to him for co authoring the climate change act for Milliband. How can he lie in bed straight when he must realise the act will bring fuel poverty to many, yet he is in charge of the organisation that is supposed to protect the consumers from excessive prices. Untenable, he should resign immediately.

    • Gerry, England permalink
      February 6, 2021 1:56 pm

      I guess every month he gets something that makes him feel better as well as a nice contribution to keeping him in the manner he believes he deserves when he retires.

  4. It doesn't add up... permalink
    February 5, 2021 7:59 pm

    Rising wholesale costs it is indeed. I calculate than since the first CFD funded generation came on stream, the money of the day cost has risen from about £110/MWh to £143/MWh, while the quantity produced has risen from about 2.7TWh to 25TWh per year. That’s an awful lot of extra wholesale cost.

    Not so long ago, balancing charges were around £500m p.a. They’ve escalated much faster than the “do nothing” scenarios of a few years ago, despite the investment in additional transmission assets for which we are paying.

  5. bobn permalink
    February 5, 2021 8:46 pm

    Isn’t this Brierley chap just another professional leftie green quango talking-shop parasite?

    • Robert Christopher permalink
      February 5, 2021 10:29 pm

      The most dangerous word in your post is ‘another’.

  6. REM permalink
    February 6, 2021 6:08 am

    Brearley went to the Ofgem quango from the Office for Climate Change quango. They keep the jobs to themselves at our expense. He is not unbiased.

  7. NeilC permalink
    February 6, 2021 8:35 am

    As we are omnivores by evolution, preventing people eating meat and dairy products is a dangerous way to go. We need certain genes from those products to balance our homeostasis and immune systems, they are not available from other sources.

    https://www.weather-research.com/weather-and-genetics look at the Chinese medicine & food section.

    Eventually this will put more strain on the NHS. Do they know what they are doing? That is rhetorical of course.

  8. February 6, 2021 9:26 am

    To construct a syllogism:

    Premise: Renewables are the cheapest form of electricity generation.
    Premise: There are more renewables than ever.
    Conclusion: Electricity prices are the lowest ever.

    Since the conclusion is wrong, one or both of the premises are not true. The second is demonstrably true. That leaves the first.

  9. Phoenix44 permalink
    February 6, 2021 9:32 am

    Ofgem know Green crap increases prices but they simply cannot admit it for political reasons. Our institutions have been corrupted from top to bottom by the requirement to lie and lie about things in order to prevent people understanding properly what is going on.

    • It doesn't add up... permalink
      February 6, 2021 1:53 pm

      Actually, it is legal reasons. It was Ed Miliband’s 2010 Energy Act that redefined consumer interest to be anything green.

  10. Bill Hutchison permalink
    February 6, 2021 10:33 am

    I sent this GWPF post to all my local Councillors (Hampshire, Fareham and Gosport) and to my MP. Please do the same where you are.
    It is no good just posting a comment for those who agree with you. Most Councillors seem only to have heard of the green propaganda – hence the number of Councils that have declared a Climate Emergency.
    Fuel poverty will be a good issue to use to lever change.

  11. mjr permalink
    February 6, 2021 10:50 am

    just reading the Sun ( i get it on saturday for the tv section . honest!!).
    story “Gas & Leccy shock” . Bills to go up by £100.
    Due to wholesale rises, plus £23 per customer to cover defaults (the Adjustment Allowance)
    https://www.thesun.co.uk/money/13951169/energy-bills-rise-households-ofgem-hikes-price-cap/
    nothing mentioned about the true reasons for the rises

    • It doesn't add up... permalink
      February 6, 2021 2:00 pm

      The Adjystment Allowance

      Consumers are finding their energy bills to be unaffordable, resulting in inability to pay.

      Solution: raise the bills still further!

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