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Renewable Subsidies Could Be Passed On To Gas Users

May 8, 2021

By Paul Homewood

 

 

What a tangled web we weave!

 

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Electricity bills could be slashed to persuade homeowners to abandon gas boilers by 2035 under green plans to be outlined within weeks.

Nearly a quarter of consumers’ bills currently cover taxes to pay for policies, including subsidies for renewable energy and fuel vouchers for poorer households.

Ministers believe these additional costs are acting as a major barrier to get people to heat their homes on low carbon electricity alternatives such as heat pumps, at a time when gas prices are lower.

The Government wants heat pumps to replace 600,000 gas boilers every year from 2028, and will announce that costs will be removed from electricity in the coming years in its upcoming Heat and Buildings Strategy.

The move is part of an ambition to end the sale of gas boilers from 2035, and from 2025 in new homes, most of them to be replaced by air or ground source heat pumps, which use electricity to pull in heat from the air or ground to supply a hot water tank.

However, households switching to heat pumps are currently paying on average £408 more in energy bills compared to running a gas boiler.

A consultation announced in the strategy will decide how much of the 23 per cent of policy costs will be removed from electricity, and how the £10 billion they bring in will be recouped by the Treasury.

Options to recover the costs include transferring the levies directly to gas bills, or adding them to general taxation, but the Government is likely to be wary of any policy that increases taxes or drives up fuel bills.

Moving the costs directly from electricity to gas will make the average fuel bill for a home using a gas boiler around £70 more expensive, according to analysis by consultancy Public First, but would make running a heat pump £200 cheaper than a boiler. Gas boilers account for around 17 per cent of the UK’s overall emissions.

More than 23 million homes will have to make the switch, which currently entails thousands of pounds in upfront costs for equipment, installation, and retrofitting insulation….

The upcoming strategy from the Department of Business, Energy and Industrial Strategy (BEIS), is expected to include a replacement for the £1.5 billion Green Homes Grant, which provided £5,000 to homes for insulation measures, and was scrapped after just six months.

It is also expected to include extra incentives to help with the costs of purchasing and installing a heat pump, which are around four times that of a gas boiler.

https://www.telegraph.co.uk/environment/2021/05/07/electricity-bills-could-slashed-green-drive-ditch-gas-boilers/ 

 

So we mandate extremely expensive renewable electricity, which makes consumers even more reluctant to move away from gas.  And then we then decide to switch some of this extra cost on to gas bills!

Talk about rearranging deckchairs on the Titanic.

 

It seems the Telegraph is finally waking up to the crippling costs of decarbonisation which is about to be dumped on the public. They now admit that heat pumps cost four times as much as gas boilers. And that insulation will cost thousands more. And that running a heat pump will also cost £400 a year more than a gas boiler. (The latter being something I have been pointing out for years).

Simply robbing Peter to pay Paul does not alter the fact that somebody has to pay. And governments clearly don’t have the money to.

Even if electricity prices were reduced in this way, I doubt whether it would make any difference at all to the uptake of heat pumps. After all, few people even know they cost more to run. What puts people off is the initial outlay, not to mention upheaval of installation.

For years, successive governments, aided and abetted by the media, have tried to cover up the true cost of climate policies. But now the truth is beginning to catch up on them.

40 Comments
  1. Brian Smith permalink
    May 8, 2021 2:24 pm

    Heat pumps: very expensive to buy and install. Insulation – without which heat pumps don’t – even more expensive (when not impractical) and redecoration; needed in every room (and you may have to recarpet as well).

    What’s not to like?

    • ianprsy permalink
      May 8, 2021 3:07 pm

      It wouldn’t be so bad if we all had the same redecorating allowance as Boris!

  2. Gamecock permalink
    May 8, 2021 2:40 pm

    Government interfering with the market . . . what could go wrong? Subsidizing weather-dependent renewables isn’t working out. Their solution is MORE interfering.

    ‘The Government wants heat pumps to replace 600,000 gas boilers every year from 2028, and will announce that costs will be removed from electricity in the coming years in its upcoming Heat and Buildings Strategy.’

    The people of the UK should remove the government by 2024.

    • Paul H permalink
      May 8, 2021 3:25 pm

      Presumably you mean removing the current administration. To what effect? All, as in ALL, parties are green fanatics, nothing would change. Our only hope is a new party emerging which is an educated, informed bunch of individuals capable of informing the voting masses of the scale of the duplicitous policies of the other parties. That won’t be allowed to happen, and in any case would take at least ten years to come to fruition. Back to your final sentence: ‘The people of the UK should remove the government by 2024’.Taken literally, yes, that’s what we need to do. Let’s try a few years without the meddlers, misfits and the generally unstable interfering in our lives.

  3. Barbara permalink
    May 8, 2021 3:46 pm

    The only people to gain in all this debacle are the PR companies beavering away. Public First claim to be ‘Public Policy and Research Specialists – We help organisations understand and influence public opinion through research and targeted communications campaigns. And we help businesses craft policy ideas that Governments can realistically apply to difficult issues.’ Rachel Wolf is the author of this latest piece. Far too cosy a relationship. with Number Ten. Open Author: Revealed: Key Cummings and Gove ally given COVID-19 contract without open tender Cabinet Office accused of breaching rules after handing £840,000 contract to PR firm run by co-author of the 2019 Tory manifesto.

  4. May 8, 2021 3:53 pm

    The Telegraph today also has an article about foam loft insulation making homes unsellable, as lenders won’t provide mortgages due to the risk of excessive condensation.

    The latest in a long line of eco and financial disasters caused by “greens”.

  5. Vernon E permalink
    May 8, 2021 4:00 pm

    I don’t know about The Telegraph waking up to these abuses. I think the opposite and I am about to cancel a lifetime subscription because under the current editor the “opposing” views to climate emergency are very muted and the horde of new young Environmental Reporters are holding sway.

    • Rowland P permalink
      May 8, 2021 5:46 pm

      Mostly clueless girls! OOOps! Sexist!!

    • Lorde Late permalink
      May 9, 2021 7:24 pm

      I’ve taken theTelegraph for the last 30 years and have noticed a steady decline. more recently it reads more like the Grauniad.
      ‘SKY’ news Australia seems the best bet now.

  6. StephenP permalink
    May 8, 2021 4:16 pm

    So if this all gets the go-ahead the business sections of the MSM will be recommending buying shares in heat pump manufacturers.

    One thing I haven’t been able to find out is the long term effect of ground source heat pumps on subsoil temperatures.
    It is a given that air source heat pumps do not work well below 7 degrees C, but how fast does heat move through soil, and over a twenty year period would the ground temperature gradually be reduced to a point where it is too cold to provide worthwhile heating.
    Another imponderable is the length of useful life of air and ground source heat pumps.
    Most of the existing renewables equipment seems to have a life of 20 years, except batteries which can be as low as 7 years.
    Presumably having just paid off the loan for insulation and heat pump, we will have to dig our hands in our pockets for replacements.
    Not forgetting the cost of a new EV and/or battery every 7 years.

    • May 9, 2021 8:20 am

      Stephen,

      the name is just another deception, they don’t pump heat from outside; in any case cold cannot heat, that’s a thermodynamic law.
      The heat is generated by compressing the refrigerant gas which provides heat. The exterior heat exchanger needs to have differential between the air or ground to cool and the smaller the differential the less work the compressor has to do and hence less heat.
      The other distortion is that they use the elctrical power used to do their calculations, ignoring the losses in producing and providing that power which roughly halves the effieciency.
      I have written a letter to the Telegraph on that article, whether it gets published?

      • MikeHig permalink
        May 11, 2021 11:27 am

        Ian R: sorry but you’ve got that backasswards!
        Heat pumps work just like a fridge but on a larger scale, extracting heat from the air or ground to warm the building. While the compressor does add energy, it is not the main source of heat. Hence a typical unit may draw 5 kW electric but have a heat output of 15 kW or more, depending on the temperature of the source (the performance of air-source machines falls off at low temps and they often have resistance heaters for really cold weather).
        Here’s a better explanation:
        https://www.nationalgrid.com/stories/energy-explained/how-do-heat-pumps-work

    • Vic Hanby permalink
      May 9, 2021 5:34 pm

      Correct. There’s a lot of work been done on this, particularly in the USA. it will take at least a couple of years for the subsoil temperature to stabilise to a repeatable annual pattern and it will be lower than the values you measure before installing a GSHP.

      Nowadays, most installed gas boilers are of the combo variety and the only sensible option with a heat pump will require a storage cylinder. OK, if you originally had one you can reinstate it (in principle) but many newish homes never had the space for one in the first place. How is this going to work? I expect we’ll be told that the heat pump can use a desuperheater on the hot gas exit from the compressor, but will this work at low external temperatures with an air-source device?

    • Lorde Late permalink
      May 9, 2021 7:30 pm

      One of my mechanic freinds left the motor trade and went into commercial A/C at the start of the rise of the heat pump. he has many tales of problems over the years.

  7. Penda100 permalink
    May 8, 2021 5:15 pm

    If the subsidy costs are transferred to gas users and 75% of the gas users switch to electricity, do the remaining 25% have to meet the whole £10 billion? I would hate to be the last gas user. Totally insane but don’t expect that to stop it.

    • Gerry, England permalink
      May 8, 2021 5:19 pm

      Expect a huge increase in the use of woodburners and a lot of the new ‘carbon sink’ trees being cut down overnight along with other woodlands. The delicious irony is that with battery powered chain saws you can do it quietly.

      • Lorde Late permalink
        May 9, 2021 7:26 pm

        Ssh!

    • MrGrimNasty permalink
      May 8, 2021 5:37 pm

      It sounds like it’s verging on a Ponzi scheme.

      Renewable energy is so cheap we have to make everything else 4 times as expensive so it can compete!

      • Phoenix44 permalink
        May 9, 2021 9:42 am

        It’s not really a Ponzi scheme, just what happens when reality meets wishful thinking. Renewable electricity is never going to be as cheap as the Greens claimed unless we accept its intermittency – which has a huge cost across the economy. So now, instead of pausing and thinking again, the original flawed policy must continue so we shift to relative cost rather than absolute cost. Make cheap stuff expensive to make expensive stuff look cheap. And all without any serious effect on the economy…but economic laws aren’t so easily fooled.

      • MrGrimNasty permalink
        May 9, 2021 3:35 pm

        Verging on…

        Obviously the early adopters are easily funded by transferring the cost, the further you go on the smaller the pool to leach off, finally the last in line……. oops.

  8. Devoncamel permalink
    May 8, 2021 5:23 pm

    Can’t see any of the opposing parties being any different. We’re stuck with the net zero policy unless there’s a dramatic volte-face.

    • Julian Flood permalink
      May 8, 2021 10:27 pm

      Or a dramatic volt-drop!

      JF
      Sorry, sorry…

  9. Harry Passfield permalink
    May 8, 2021 8:12 pm

    So, on my dual fuel contract, my cheaper leccy will pay for my more expensive gas.
    Does Princess Nunb-Nuts hire all the ‘talent’ in this government?

    • Julian Flood permalink
      May 8, 2021 10:13 pm

      Have lots of upticks for ‘Princess Numb Nuts’ a description that the urban dictionary I consulted defines as a person who causes devastation wherever she goes.

      JF

      • Phoenix44 permalink
        May 9, 2021 9:44 am

        Yet another youngish person who despite lacking any knowledge, any experience and any evidence of actual intelligence sincerely believes she knows how to reorder the world.

        The sheer arrogance of this generation is extraordinary.

    • MrGrimNasty permalink
      May 9, 2021 3:56 pm

      Only until they’ve got you/a lot of people/everyone off the gas, then wham, electricity price sky rockets!

  10. Julian Flood permalink
    May 8, 2021 10:26 pm

    Labour has gone, Libdems are toast, the minor parties are ignored, all that is left is a political monoculture of woke, ignorant and ranting Green wets who wouldn’t know which end of a spade to shove in the ground. Eventually the penny is going to drop: the energy policies espoused by most western governments will wreck our civilisation. First to break ranks and declare that the Emperor has no clothes will gain incredible industrial advantage.

    A political party with the financial bottom to fight against the Climate Change hysteria would change the face of UK politics, but it might be a long haul. The wait could be short — a Grid collapse will kill people and lead to the fall of the government — or the slow drip drip of austerity, failed industry and the withdrawal of the ability of anyone but the rich to afford warm homes, private cars or overseas travel will eventually bring home to voters that the agenda of the deep Greens is not in their interest.

    JF

    • Mack permalink
      May 8, 2021 11:03 pm

      Well said Julian. A formerly very successful socialist perceptively noted that there comes a time when lies collapse under their own weight and truth triumphs once again. This was a man who fervently believed in the theory of ‘the big lie’, until getting found out of course. Even the great propagandist Goebells knew when he was playing cards with a busted flush.

      A principled politician, who has the courage to grasp the ‘no net zero’ nettle, may well find themselves in a position to challenge the current narrative. Particularly when the financial pips start to squeak amongst the great unwashed once green dreams collide with cold reality. And, reality, based on previous seasonal solar and current cycles, does look a tad chillier in the decades to come. One can only hope.

    • Phoenix44 permalink
      May 9, 2021 9:52 am

      I think a great number of Labour voters understand that Labour now positively opposed the working classes. The Metro elites despise them, and think they are racist, greedy and ignorant. They blame them for Brexit, blame them for racism, blame them for wanting a better life rather than the noble poverty (wealthy) London Labour activists think they should want. Labour is now the 21st century equivalent of the 19th century Tories – wealthy, arrogant, authoritarian, anti-democracy and determined to keep the lower orders in their place.

    • deeckay60 permalink
      May 15, 2021 9:37 pm

      JF “First to break ranks and declare that the Emperor has no clothes will gain incredible industrial advantage”. Sadly wrong. Those not joining the ranks will already have that advantage as our daft politicians have already given it to them.

  11. Graeme No.3 permalink
    May 8, 2021 10:53 pm

    I was told when young that the first thing to do when you’ve found your in a hole is to stop digging.

  12. Mack permalink
    May 8, 2021 11:24 pm

    O/T For all those fans of electrification (and heat pumps) I note that copper prices have just hit a record high, up 115% since the global lockdown started in March 2020, as countries across the world start re-booting their economies. Mining output is unlikely to match demand anytime soon with metals prices set to rise much further. Saving the planet from imaginary man made global warming just got a lot more expensive.

    • MrGrimNasty permalink
      May 9, 2021 3:48 pm

      There will be a lot of replumbing required to fit heat pumps, some of it does not have to use copper but a lot of it does (or equally costly retail s/steel).

      Everyone will need a new heat pump compatible hot water cylinder regardless, I wonder if that likely £1k+ cost has been included in the estimates, or ignored like the insulation and new central heating distributing system, redecoration, services relocation etc. etc.!

      • Gerry, England permalink
        May 9, 2021 4:16 pm

        Not to mention the huge amount of copper needed in battery cars.

  13. David permalink
    May 9, 2021 10:33 am

    Has anybody realised that rows of houses all noisily blowing out cold air from their heat pumps are likely to increase the spread of Covid 19 (or 21/22/23) germs?

    • MrGrimNasty permalink
      May 9, 2021 3:52 pm

      Not sure how – it’s a heat exchanger, not an air exchanger.

      Living in a sealed insulated box does go against advice to keep buildings breezy to reduce the risk of infection indoors though.

      • StephenP permalink
        May 9, 2021 5:12 pm

        Making houses hermetically sealed is not a good idea as it leads to condensation problems, especially in kitchens.and bathrooms.
        They need ventilation, either by opening windows which rather destroys the object of the exercise, or by installing a heat recovery ventilation system which adds further expense.

  14. Ray Sanders permalink
    May 9, 2021 12:19 pm

    The real world numbers for air source heat pumps bear no resemblance to the fictitious figures being promoted by the “official” reports. A friend of mine (not on the gas main) replaced his oil fired heating system with an air source heat pump in summer 2018 believing oil prices would get significantly higher – they didn’t! It should be noted he also had an Economy 7 electricity tariff and time shifted use of washing machine, tumble dryer and dishwasher to low rate use.
    Living in a bungalow with solid floors, all radiators had to be enlarged and with some this was a major issue. With the increased water content in the system the existing pump (rated at 60W) was deemed inadequate and was replaced with a larger unit (rated at 90W). The hot water cylinder was replaced with a much larger one with twin immersion heaters.
    The first most notable operating difference was that the oil boiler ran 1 hour in the morning and 5 hours in the evening on weekdays slightly differently at weekends. 6 hours of the circulating pump running for 360Wh electricity most days. The new system saw this 90W pump run up to 16 hours some days at at over 1400Wh per day. Multiply that small difference by 31 days in the month and the amount starts to become significant.
    But that was just the start, running a bath was a major problem and required the immersion heating to run on a daily basis for an adequate hot water supply. Previously the immersion heater was an emergency back up but now it became an operational necessity. In the region of an additional 5 – 6 kWh daily was being used.
    Then there was the CoP issue where he was quoted 3 but he was not advised that under EN16147 this was measured at an outside air temperature of 7°C and that most of the winter the air temperature would be significantly lower as would consequently be the CoP. Despite being in Kent, just 5 miles from his home a record low of minus 21.3°C was recorded in January 1947 and it can regularly go well sub zero particularly with easterly winds. It was hard to definitely ascertain but it appeared the real world CoP was mostly nearer 2 and often lower. Furthermore in colder weather the radiators still were not up to full house heating so he reluctantly bought logs and regularly lit the previously largely ornamental wood burner.
    And then he discovered that if he went away (for a long weekend break for instance) in the heating season, rather than switch the boiler to frost protect and programme the 7 day timer to come back to full use just prior to his return, he now had to leave the new heating system running all the time or return to a freezing home that took hours to warm up.
    Add to that the additional electricity he was using (ASHP, circulating pump and immersion heaters), was frequently in the 17 hours of “non economy 7” which carry a premium price. and which he had not even considered.
    The nett result was that despite the ASHP being compared to oil (not gas) it was still much, much more expensive to run. Yes he does get a subsidy to offset this increased cost but as far as he can calculate he is not really any better off financially. In emissions terms the significantly increased electricity consumption probably results in no improvement anyway.
    The final insult was the first power cut – in this rural area not an unusual event. Previously a deep cycle battery and an inverter kept the oil boiler going and the house warm – not any more.
    If he could change back he would.

    • MikeHig permalink
      May 11, 2021 11:41 am

      Ray S: thanks for that post. Do you happen to know whether the pipework had to be uprated as well as the rads? That would be even more disruptive.
      Your friend’s experience is similar to that of a son of one of my friends. He moved from a gas-heated home to a much newer one with an ASHP. His total energy bill more than doubled. Fortunately he gets some sort of grant or subsidy which brings the cost down quite a bit but I don’t know how long that will last.
      I’m interested in the use of a battery back-up for the old boiler because I want to install something similar for my gas boiler. Was it a proprietary package or a DIY job?

  15. John Wainwright permalink
    May 10, 2021 8:47 am

    Then of course, when they’ve got us all to get rid of our gas boilers the electricity price will go back up again.

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