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Excessive renewable energy subsidies are now a major obstacle to Net Zero

May 6, 2021

By Paul Homewood

 

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As the rising costs of renewable energy subsidies are beginning to throw a spanner in the government’s decarbonisation policies, the Global Warming Policy Forum is proposing a radical reform of UK energy policy: removing subsidy costs from consumer energy bills and instead fund the cost from central taxation. This would expose the huge and currently hidden costs of renewable energy to democratic scrutiny.

Electricity is widely agreed to be crucial to decarbonisation efforts, yet renewables and their subsidies make electricity extremely expensive, adding over £12 billion a year to consumers’ electricity bills. This high and rising cost is a strong disincentive to adopt electric cars or heat pumps. Only the well-off will be able to afford them.

The influential public relations firm Public First has produced a study, supported by the major electricity suppliers, which sketches a means to fund part of the renewables subsidy costs from central taxation and so remove this obstacle to electrified heating. Only subsidies raised from household bills (about 40% of the total) would be replaced, and this relief would be offset by a new carbon tax on gas and electricity.

GWPF is today publishing a comment on Public First’s reform proposal,  concluding that though a step in the right direction it is inadequate to the task, for the following reason:

1. The proposal does not provide real relief to consumers, merely moving the cost from electricity to gas via a carbon tax.

2. Revenue from the proposed carbon tax would inevitably fall over time, increasing the burden on taxpayers in the wider economy.

3. The only winners from the proposal, are the energy companies who funded Public First’s work, since they are able to swap a difficult and uncertain revenue stream from consumer bills with a gilt-edged cashflow from the Treasury. This is deplorable.

Nonetheless, Public First’s work has given prominence to a well-known problem, namely that very large and rising subsidies to renewables are now a major obstacle to the government’s Net Zero policies.

The Global Warming Policy Forum therefore suggests that ministers consider a more radical approach to reform, removing subsidy costs from all consumer bills, domestic, industrial, commercial and public sector, and instead fund the cost from central taxation. This would expose the huge and currently hidden costs of renewable energy to democratic scrutiny.

The GWPF believes the public realisation of the true cost burden would not survive such an audit. Indeed, cancellation of renewables subsidies and the adoption of more cost effective low-carbon policies would be a huge step towards revitalising the British economy.

Dr John Constable, the GWPF Energy Editor, said:

There is an urgent need to cut subsidies to renewables in the UK. Removing them from the national electricity bill and funding them from general taxation, so that the public can see what is currently being spent by stealth is a necessary first step. Democratic audit and cancellation will be the next move. It can’t come too quickly.”

28 Comments
  1. Broadlands permalink
    May 6, 2021 3:10 pm

    Renewables have no affect on Net Zero. By definition, they cannot balance what has been added by removing an equivalent amount.

    “Net zero refers to cutting greenhouse gas emissions as far as possible and balancing any further releases by removing an equivalent amount from the atmosphere.”

  2. REM permalink
    May 6, 2021 3:10 pm

    If anyone spots this appearing in any MSM please say so here.

  3. David Calder permalink
    May 6, 2021 3:21 pm

    Will this nightmare ever be over? I was looking forward to being able to plan for a future again. However, now I think we might need to take back control – by any means possible – from our elected ‘representatives’ since they only represent the Gate / Soros interests now. Dangerous times. Fake news media implicit and owned by Gates too.

    • Harry Passfield permalink
      May 6, 2021 7:42 pm

      David, while I can agree with you at an emotional level and share a realistic need to ‘take back control’, I am reminded of what taking back control looks like when other people are doing it. Think XR, BLM, Antifa, – with their friends in the courts – you name ’em.

      We would need to be many times more active and activist to get close to opposing what these nihilists want and I cannot see that, as justifiably as we feel we have been lied to, that we have the firepower to effect a force-majeure on our leaders. Perhaps, things will only change when enough people realise they have been conned. That means we need to keep battering at the lies told by the BBC and MSN, and taking back control of the education of our grand-children by exposing that part of the lie.

  4. Mack permalink
    May 6, 2021 4:12 pm

    Following on from your post on the RAF wanting to go ‘jet zero’ I note that that there is a legion of commercial companies also chomping at the bit to get their snouts into the renewable subsidy trough through obtaining ‘investor certainty’ from HMG on developing ‘sustainable’ aviation fuel. The umbrella outfit for the companies involved spells out their ‘pathway’ to success at http://www.sustainableaviation.co.uk. Whenever one hears the word ‘sustainable’ in an investment pitch to government you just know that the poor taxpayer is about to get their pockets picked again.

    • Harry Passfield permalink
      May 6, 2021 7:45 pm

      It’s the state/tax-payer funding they hope will be most sustainable.

  5. Fundo permalink
    May 6, 2021 5:15 pm

    Another possible benefit of central taxation is the elimination of the regressive subsidy costs to folks of low income and placing those costs on the more wealthy who can more afford them.

    • Julian Flood permalink
      May 7, 2021 4:33 am

      High energy prices and the nonsense of heat pumps and electric vehicles impact most on the poor. The old and the sick suffer disproportionately as they need more energy simply to maintain or improve their health.
      Most people don’t realise that they pay subsidies directly on their energy bills. If that were made clear then they might be inclined to vote for change, rather than just accepting the same old troughers as their representatives.

      JF

    • Phoenix44 permalink
      May 7, 2021 9:35 am

      What you pay for something should not be based on how much you can afford to pay for it.

  6. Ian Phillips permalink
    May 6, 2021 5:32 pm

    The research and information from all of us concerned about the mad cap Green New Deal, has been excellent. For me the only missing factor is that I do not know whether anyone/group has come up with an alternative energy plan…..a serious piece of work, to put forward/circulate to garner support at a professional and political level.

    Clearly we should keep FF going while developing such a plan with a balance of the newer wind/solar/tidal, etc, and including a measure of FF, and the development and implementation of a new generation of our own nuclear industry….so we can all sleep at night.

    Does anyone know if such a plan maybe already exists?

    • Harry Passfield permalink
      May 6, 2021 7:50 pm

      No, Ian, but I have just come up with a slogan:
      ‘FF FF’s sake!’ (Which has the added advantage of using a musical direction to make it very LOUD) 🙂

    • Julian Flood permalink
      May 7, 2021 4:47 am

      High energy prices and the nonsense of heat pumps and electric vehicles impact most on the poor. The old and the sick suffer disproportionately as they need more energy simply to maintain or improve their health.
      Most people don’t realise that they pay subsidies directly on their energy bills. If that were made clear then they might be inclined to vote for change, rather than just accepting the same old troughers as their representatives.

      JF

    • Julian Flood permalink
      May 7, 2021 4:50 am

      Sorry, having trouble posting. Extend gas grid, use CH4 as a bridge fuel to SMRs, if CC hysteria turns out to be nonsense a lot of money saved.

      JF

    • Broadlands permalink
      May 7, 2021 1:24 pm

      Ian…There is a plan that couples adaptation to mitigation.. The Cancun Adaptation Framework.

      https://unfccc.int/topics/adaptation-and-resilience/the-big-picture/what-do-adaptation-to-climate-change-and-climate-resilience-mean

      The problem seems to be that the Paris Agreement plan for CO2 mitigation has taken over as the priority plan in dealing with this factional increase in global temperature of less than one degree C. Phasing out carbon fuels while carefully phasing in alternative energies with a focus on adaptation innovations should make sense, regardless of what the climate does.

  7. Jack Broughton permalink
    May 6, 2021 6:44 pm

    The meja today are reacting to the French power reduction threats by demanding extra security, such as SMRs. One interesting view was that the coal-fired power stations should be preserved to meet such issues. Hopefully, the benefits of coal fired power stations will be recognised in terms of massive energy storage in their coal-piles.

    Unfortunately, our political heroes are too busy fighting the “climate war” to do anything sensible: Don Quixote comes to mind…..

  8. Joe Public permalink
    May 6, 2021 7:46 pm

    There is an urgent need to cut subsidies to renewables in the UK.

    I agree wholeheartedly.

    Removing them from the national electricity bill and funding them from general taxation, so that the public can see what is currently being spent by stealth is a necessary first step.”

    I disagree.

    The amount of subsidies charged-for on an electricity bill should be itemised on every bill.

    Only by itemising those costs on the bill the consumer pays, can the consumer be repeatedly reminded just how much subsidies are actually costing him/her.

    • Harry Passfield permalink
      May 6, 2021 7:52 pm

      Agreed!

    • Phoenix44 permalink
      May 7, 2021 9:38 am

      And remove the arbitrary taxation as well and itemise that.

      If people saw the underlying costs and then the costs the government is making them pay they would see things very differently.

    • May 7, 2021 9:57 am

      There is this breakdown of an electricity bill at OFGEM, but a deeper analysis would be required. For example, how has the green mutation affected network costs? It also needs multiplying by the typical annual cost to give people the due fright.

      Annual cost…………………………………………..Percentage
      Wholesale costs……………………………………….33.87%
      Network costs…………………………………………..22.26%
      Operating costs………………………………………..16.77%
      Environmental and social obligation costs…….22.92%
      VAT……………………………………………………………4.76%
      Supplier pre-tax margin………………………………-2.07%
      Other direct costs……………………………………….1.48%

  9. May 6, 2021 10:48 pm

    ASAP, legally and contractually, the whole decarbonisation programme should be abandoned, at least in the UK whose negligible greenhouse gas output is negligible!
    The other justifying reasons are legion, as readers of these columns well know.

    All the alternatives to fossil fuels, apart from nuclear and hydroelectricity are dud.

    Do we have any politicos with the insight and the sense and strength of mind to act accordingly?
    Names on a postage stamp, please.
    (Or should we ask Mr Xi or other orientals to advise thus helping us to avoid the dud decarbonisation policies?)

    • chriskshaw permalink
      May 6, 2021 11:42 pm

      We do have an Australian senator, Malcom Roberts, who regularly take on BoM and CSIRO et al to provide empirical evidence to support what ever nonsense is being espoused in their senate. The expression on the directors of these institutions is priceless as they promise to answer later (I’ll get back to you with the data). And his follow up debunking the “peer reviewed” papers they provided as evidence also a joy to watch. One in the House and one in the Lords should do it….

    • chriskshaw permalink
      May 6, 2021 11:42 pm

      We do have an Australian senator, Malcom Roberts, who regularly take on BoM and CSIRO et al to provide empirical evidence to support what ever nonsense is being espoused in their senate. The expression on the directors of these institutions is priceless as they promise to answer later (I’ll get back to you with the data). And his follow up debunking the “peer reviewed” papers they provided as evidence also a joy to watch. One in the House and one in the Lords should do it….

  10. Matt Dalby permalink
    May 7, 2021 1:09 am

    It’s all well and good exposing the costs of renewable subsidies to democratic scrutiny, but if things stay the way they currently are, i.e. every major party backing net zero, then more people may know about the cost but still won’t be able to vote against it.
    It was interesting that of the election leaflets from all the major parties I got ahead of the Scottish Parliament elections all of them except the Conservatives gave investing in renewable energy a high priority. Obviously given Boris’s (or should that be Carrie’s) recent pledges either the Scottish Conservatives have a radically different view from the UK party, or they support the same agenda as everyone but don’t publicise it. What we need is a new “no net zero” political party, and sadly I haven’t seen any real evidence that the new parties such as Reform and Reclaim are stepping up to this particular challenge. Such a party wouldn’t need to gain power, just threaten to take a lot of votes from the Tories, as UKIP did, so they change their policy.

  11. Julian Flood permalink
    May 7, 2021 4:53 am

    When I found that the Minister for Energy and Climate change was not aware that electricity must be either used at once or stored at once, I realised we are in the deep doo doo.

    JF

  12. Thomas Gough permalink
    May 7, 2021 11:24 am

    All of the above is simply kicking the ball around a small court in the hope of getting an answer. The fundamental point is that our climate is controlled by the sun and there is good evidence of a natural downturn in the climate. i.e. a new ‘Little Ice Age’ or similar beginning and likely to last several decades. CO2 is NOT a problem. Use gas, coal whatever.
    https://electroverse.net/we-entered-the-modern-grand-solar-minimum-on-june-8-2020/

    • May 7, 2021 12:29 pm

      That makes intuitive sense and greenhouse gas alarmists heave never disprove the sun as the primary influence on climate, as on so many more Earthly variables.
      GIGO explains their false models, along with money chasing.
      Theresult could well become our ruination with Oriental triumph.
      Suppression of “denialists” is scandalous. The ROYAL Society has prostitutes itself.

  13. Eoin Mc permalink
    May 7, 2021 11:53 am

    As you would say Paul what world are the fence sitting GWPF living in. While the true level of renewable energy subsidisation is not stated on electricity and gas bills there is enough for the ones bothered to monitor the insidious rises. Were the cost of the subsidies to be instead lumped into the general taxation pot there would be considerably more obscurity in working out the myriad complexities in balance sheets, offsetting and the like and where eventual rises in income taxes would be impossible to delineate.

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