Government plans to scrap green energy levies welcomed
By Paul Homewood
Good news!
Net Zero Watch has welcomed the government’s intention to consider scrapping green energy levies on energy bills.
According to the Daily Telegraph, “government officials are examining whether the controversial levies – used to fund renewable energy subsidy schemes – could be phased out gradually or dropped altogether by the autumn when bills are expected to soar.”
Green levies cost the UK economy about £11 billion a year in total, putting £150 a year on the average household electricity bill, and a further £250 per household on the annual cost of living, a total of £400 per household per year. The levies also depress wages and rates of employment.
Net Zero Watch and a long list of MPs have repeatedly called on ministers to remove these subsidies from energy bills to help reduce the mounting cost of living crisis.
Dr John Constable, Net Zero Watch director of energy, said:
Given the high prices now available in the electricity markets it is evident that wind turbines, solar panels and biomass power stations no longer need any subsidies and should now be able to compete as pure merchant generators.”
Putting renewables on a market basis would also help to reduce system operating costs, and prevent green generators subsidised under the Renewables Obligation from, as is increasingly suspected, taking both the very high market prices and the subsidies, thus generating hyper-profits.
Steve Baker MP said:
In light of the deepening energy cost and cost of living crisis the government seems to be making gradual progress towards a more realistic energy policy. Making the public poorer and colder never seemed likely to survive contact with electors. We can only hope ministers now accelerate reforms to a policy which is socially, economically and politically viable.”
Dr Benny Peiser, Net Zero Watch director said:
It would appear that ministers are realising that billions in subsidies for renewable energy is no longer compatible with the cost of living crisis, threatening the welfare of tens of millions of households and undermining economic and political stability. The longer the Government delays terminating handouts for renewable energy investors the higher the economic and political cost for consumers, businesses and the government.”
Net Zero Watch has published a simple one page factsheet on the cost of the green levies to indicate the scale of financial help scrapping them would be offered to households. — Factsheet: The cost of green levies (pdf)
It will be interesting to see exactly what the government does with the levies – will they simply transfer them onto the Exchequer as public spending, or will they get rid of them completely?
I am pleased they have highlighted the fact that most renewable generators are still raking in subsidies, while at the same time benefitting from sky high market prices.
Below, by the way, is the Factsheet mentioned above:
Comments are closed.
NOT A LOT OF PEOPLE KNOW THAT 
About time too. A lot of unpleasant troughers have profited from the renewable energy subsidy scam whilst the general public has suffered (particularly those living near wind farms, solar farms and anaerobic digesters).
I live near an anaerobic digester. Doesnt bother anyone. They sited it well on the corner of an airfield so just looks like anothwer aircraft hanger, and on an existing main road so the extra traffic is not noticed. Its not in the same league as monster turbines (small windmills are ok; keep less than 60ft so below top of tall trees.)
Near where I live there are several anaerobic digesters that use massive vehicles on unsuitable lanes and they spread evil-smelling digestate near to people’s homes. The operators of the AD plants ignore planning conditions and make peoples’ lives a misery. The operators do not care – it is all about making money from the massive subsidies.
Can’t see this happening with BJ and princess nut nut in No10.
I think you mean Numnuts. Slang for a person who spreads disaster wherever she goes.
JF
Carrie Antoinette. Let them buy Teslas…
Correct, NeilC…
Energy bill green levies won’t be scrapped despite cost-of-living crisis
Boris Johnson dismisses proposal backed by prominent Tories and says there is ‘a lot of prejudice against the green agenda’
21 April 2022
https://www.telegraph.co.uk/politics/2022/04/21/energy-bill-green-levies-wont-scrapped-despite-cost-of-living/
The green agenda has been prejudiced against ordinary people and businesses since it started
I’m not sure that the Green subsidies are depressing employment – at least not in China. I just hope the Chinese turbine manufacturers are suitably grateful.
As long as its not just transferred to gas bills under an ‘anti gas boiler’ charge.
Good point!
Converting ICE-powered vehicles to low carbon, ultra-low NOX and particulates compressed natural gas and extending the gas grid would cut UK’s CO2 footprint massively.
If only we were sitting on 50 years supply of the stuff.
Oh, look! We aren’t. We’re sitting on 150 year’s supply! Treble gins all round!
JF
I can’t see it happening, too many matey mates, but they should just scrap all the subsidies, reduce the fit to a reasonable rate and then let the buggers sue if they don’t like it. Could take years and be a PR catastrophe it played right.
It will be interesting to see how the BBC treats the scrapping of levies if they go through. ‘Cheaper than ever’ or alarm? Levies certainly should be dropped for industry if manufacturing inthe UK is to remain viable.
If – and it’s a big “IF” – this actually goes ahead, there will be howls of outrage from the troughers complaining that it will stifle investment, etc…
Green levies should never have been there in the first place. What is also needed is refund of all those taxes already paid by consumers i.e. ordinary people and businesses
Umm doubt they will undo the current schemes this will just dump transfer cost onto HMT who will then seek to get it back other ways. Maybe some sort of windfall tax seems appropriate given any attempt to drive energy costs down is probably a lost cause unless some saint takes over in Russia so these windfall profits are here to stay.
Are these subsidues not contracted?
If so then govt. is unlikely to be able to change the extant arrangements unilaterally.
Hence, most likely outcome must be to recover these costs from a windfall tax; the threat of which might persuade generators to renegotiate contract subsidies.
You never hear anybody in the climate box talk about windfall taxes on renewables even though they must be coining it atm.
The terms for ROCs and FiTs include a guarantee of compensation and protection from windfall taxes I believe. But I don’t see why there shouldn’t be some pressure to accept deferred payment – deferred until prices are much lower, and no large level of interest or indexation compensation for the deferment either.
What if energy prices stay as high as present: the UK would not compete with the USA. The EU will be uncompetitive on almost everything. We must get fracking, increase gas storage, add new power stations and explore for more oil, surely, if the UK is to have a chance of being anything but a short-term finance centre,
“Good news”?
Is it?
I hope the Govt doesn’t ‘scrap’ Green levies. IMHO they must remain in place as a constant reminder to voters that Green policies cost them. £Lots. Annually.
They can’t scrap subsidies for existing and contracted facilities. They would be sued. All they could do is scrap the CfD scheme for future facilities.
Then they would find that no-one would bid for new renewables provision, and their Net Zero targets would not be met.
So I think this is not going to happen.
“They can’t scrap subsidies for existing and contracted facilities. .” Oh yes they can
Law of contract can’t be ignored.
Yes they can scrap the levies as they stand. Instead, they would have to find some other way of funding the contractual payments to the renewable energy suppliers.
So in practice scrapping the levies would mean the taxpayer pays instead. The suppliers would still get their subsidies, and they would still be paid by us, the ordinary people. The cost burden would shift slightly, away from large electricity users and onto people who pay most tax.
KB. You are right. The problem for the Government is how to prevent the generating companies from both profiting from the green levies AND the high prices. When the facts change, as they have, the Government have lawyers to argue the case for a root and branch change to the present agreements. Contract law will have a ‘condition. covering this such as ‘unjust enrichment’ I am sure.
Nick Decker. I’m not a lawyer and possibly you are correct. When the top lawyers and courts get involved anything can happen. But do we really want to live in a country where large organisations (who can afford the lawyers) can wriggle out of firm contractual commitments ? If they can do this they can wriggle out of paying pensions for example. Do we want that?
“Then they would find that no-one would bid for new renewables provision”
Which would have much the same effect as the current hoo-ha over Elon Musk’s attempt to buy Twitter: it would be an admission they only build solar & wind farms when assured of substantial subsidies.
Yes, once the gov. has succeeded in forcing up the price of all energy to a level where renewables can compete on a level footing, subsidies are no longer required!
But the cost of energy will still end up 3 to 6, 4 to 8, or whatever times the cost it would have been without the ruinables, be it met directly on your utility bill or otherwise.
What a mess.
The government is ‘intending to consider’ scrapping green levies has about as much merit as me ‘intending to consider’ accepting that we are living in a climate catastrophe. We aren’t, so I won’t. HMG won’t either. They might do a little tinkling around the edges of the subsidy trough for future developments but pulling the plug on subsidies en masse will simply leave all their green chums high and dry.
Spot on.
I have as much faith that this will happen, as I have that you’ll see Vladimir Putin’s smiling face at the next Quakers’ meeting in the Friends Meeting House. (Although I’ve no doubt he would be made welcome.)
Others have pointed out the Contractual problems, which will of course be used as a convenient excuse to avoid doing anything (and to make sure those nice brown envelopes keep coming.)
But the Government (and predecessors) have a very long history of resolving little ‘contractual’ problems IF they WANT to do so.
An obvious initial approach is to stick a nice big “Windfall Tax” on them. Been done times a many on the Oil & Gas industries.
Next step is to in future purchase, or accept, ONLY energy supplied on a 24/7 basis, ready for feeding directly into the grid and with adequate inertia to get over the normal short term fluctuations that thermal power stations cope with as a matter of course.
Meanwhile, send the plod around to all the Ruinable Company charlatans and promoters and collect all the evidence of their mendacity and dodgy deals.
They won’t like it up ’em. And a tad more important than cake-gate.
We have the most duplicitous PM for a long, long time. If anyone is capable of breaking all these contracts it’s Bunter.
I have a remarkable capacity for re-interpreting provisions in legal agreements in ways that the framers had not intended. I think there is perhaps a small amount of wiggle room: I could be creative with Electricity Act 1989 32LA:
Renewables obligation closure order
(1)The Secretary of State may make a renewables obligation closure order.
(2)A renewables obligation closure order is an order which provides that no renewables obligation certificates are to be issued under a renewables obligation order in respect of electricity generated after a specified date.
(3)Provision made under subsection (2) may specify different dates in relation to different cases or circumstances.
More duplicitous than May, Cameron, Brown and Blair? Really not. They are all constant liars.
Let’s leave ALL the ‘Green Energy’ initiatives on the scrap heap . . . Please. Clean Green Energy and Net Zero programs may be the biggest fraud ever committed on planet earth.
All the ‘Green Energy’ products add as much or more carbon during their production than they will ever replace during their productive lifetimes. Plus the environmental damage done in China where most of the components are made will have a far more wide spread and global effect on the environment than Carbon will ever have . . .
https://www.academia.edu/76965285/Clean_Green_Energy_and_Net_Zero_Fairy_Tales_on_Steroids
“…the government’s intention to consider scrapping green energy levies…”
Well, one-and-a-half cheers for good intentions…
Translation: The Government is going to ‘try’ to scrap green levies: To ‘try’ is a commitment to fail. When you tell someone you will ‘try’ to do something, and that ‘something’ does not happen, you can – will – always get away with the failure by claiming: I only said I’d try!
Never, ever allow people to tell you they will ‘try’ to do something: get them to commit!
Or . . . Have them committed . . .
“Do – or not do. There is no ‘try'” Some famous puppet or other…
” Cost of Living: Scottish Power boss warns Sunak things are going to get ‘truly horrific’ ”
https://www.independent.co.uk/news/business/energy-prices-cost-living-scottish-power-b2060661.html
Burn coal.
Where? Hardly any coal power stations left in the UK.
Best start building then, five year construction programme. This was covered in some detail on another post here,
yeah the same CEO of a company that making 100’s millions pounds of additional profits
“EON boss Michael Lewis described the current situation as “unprecedented” and expected it would have a “severe impact” on the ability of his customers to pay their bills.”
“Lewis warned between 30-40 per cent of energy users could fall into fuel poverty this October, when market regulator Ofgem is expected to hike household energy bills again.”
From https://www.cityam.com/energy-chiefs-urge-government-to-offer-more-support-for-households/
Shambolic
What are “additional profits”?
Whatever is happening to gas or oil prices, its not been caused by them but by governments.
The UK is sitting on 150 year’s supply of a low carbon fuel which is much less costly to extract than deep coal and which causes fewer earth tremors than a coal mine*. I’d welcome inputs from anyone with expert knowledge of how much open cast coal would be available in the UK should we go for that solution to the energy crisis.
‘The sensible speech on climate the PM will never give’ is at TCW. It suggests a route to a low carbon future (should that prove necessary) while keeping the lights on. It’s a non-hair shirt procedure that, if the climate hysteria turns out to be nothing but that, will leave us with a fully functioning economy,
JF
*Or geothermal fracking. Or quarrying. Or a very large HGV rumbling past your window.
Why restrict coal supplies to coal from the UK? Is it not permitted to import coal? This is an energy emergency.
Kwasi Kwarteng made a statement to HoC tonight just spouted out how wind will be 50GW by 2030 – farcical no hope of achieving that thank god – but no mention of changing incentives and resulting levies.
Anyhow good news is cheaper energy is coming from their strategy!
Wind capacity but at some times on some days 0GW of generation.
Wonderful.
There are alternative explanations for why Mr Kwarteng thinks that greatly increasing wind power is a good thing: he doesn’t understand that electricity once generated has to be used at once or stored in a battery or battery equivalent like hydrogen: he doesn’t understand that the Grid is a wonderfully impressive balance act between production and consumption; he is STEM-illiterate and is out of his depth; his civil servants are out of his depth.
It’s unexpected that he hasn’t done the sums — sometimes wind turbines, all of them, produce SFA. Multiply SFA by four or five and you get…. SFA. He’s not a PPE graduate is he?*
JF
Gridwatch Templar gives an insight into how the Grid is coping.
*An unfair comment, he’s a very intelligent man. He’s just not using his intelligence.
Not much intelligence needed to see that n*0 = 0, where n is the total wind turbine capacity and 0 is the current wind speed.
Don’t forget input energy to a wind turbine when wind is low.
Indeed but equally frustrating is other MPs could challenge him sensibly and though he cant answer they dont its just political pkint scoring. I know they all major on same policy on wind but there job is to challenge to ensure strategy is robust and deliverable. Hopefully BEIS select Committee will do a deep dive into it.
We all agree that intermittaccy is the failure of windturbines. This can be overcome by using liquid fuel in our CCGT plants (and increasing their number). But there will be some complicated financial engineering to be done to ensure that the CCGT generators are viable.
All energy sectors should be treated the same. OECD data that claims that from 2016 to 2020 oil and gas companies received £9.9 billion in tax reliefs for new exploration and production and £3.7 billion in payments towards decommissioning costs. This should also be removed?
In the UK oil companies pay extra tax and receive no subsidies at all.
Same in almost every country in the world. Extortionate taxes both on the oil companies themselves and AGAIN at point of sale and ZERO subsidies. Look at the tax element of the actual price at the pump.
At UK petrol/diesel pumps, VAT is charged on the fuel duty. A tax on a tax.
Renewables also get depreciation and abandonment reliefs. There is nothing abnormal in allowing costs against tax. If you disallwoed depreciation then wind would never compete agaist coal and gas where the cost is the fuel rather than the capital expenditure.
Sorry to be late here. Sometimes I’m away for so extended periods.
The problem isn’t just ‘green taxes’.
If you have a company suffering ‘green tax’ you also have to spend, as with regular tax, an age working out your ‘carbon tax’ liability .
Companies and their Directors just sell up and get out.
The problem with that is that you don’t just have ‘green tax’, you have unemployment for those employees subject to this cr+p.
Sorry, my point was that one can’t pay ‘green’ if you have no industry and no job.
That’s fine except that the people who are pushing planning applications for solar farms of all sizes make fortunes at a price of >£250/MWhr out of everyone else. This is an enormous shift of cash from those least able to afford it. There are two approaches: a) the price of proper disposal of the panels at the end of the planning consent should be paid upfront through escrow – this will double their cost and b) a windfall tax above £100/MWhr
Up to when ROC subsidies were withdrawn in 2015/16, solar farms were profitable at a gross income (ROC + market price) of approximately £100/MWhr. After the ROC subsidy was withdrawn, not a single solar farm was built until recently. Government policy before this net zero imposition was benign, if I can put it like that. Getting rid of coal became a priority to blunt the NUM; then we had to comply with EU emissions which proscribed the life of coal powered stations. The market value of energy was never meant to be a get-rich-quick ticket.
Oil and gas industry in the uk have received from 2016 to 2020 £9.9 billion in tax reliefs for new exploration and production and £3.7 billion in payments towards decommissioning cost https://stats.oecd.org/Index.aspx?DataSetCode=FFS_GBR The issue here is uk energy subsidies, not ‘green’ subsidies.. Does this website select its facts only to pursue a single narrative, rather than a complete truth?
No they have not – get your facts straight
Not my facts but the OECD’s that you have used to selectively support your point of view in other articles on this site. You ignore that the fact that fossil fuel companies have been receiving gross support in the region of USD 45bn per year throughout the 90’s, 2000’s.and early 2010. see p37 https://read.oecd-ilibrary.org/environment/inventory-of-estimated-budgetary-support-and-tax-expenditures-for-fossil-fuels-2013_9789264187610-en see p40 The UK was no different than any other country in this period, in that is heavily supported oil and gas industry. To ignore this and only focus on current renewable support is hypocritical?
The UK does not subsidise fossil fuels, whether the ROW does or not
No . . . it, in my opinion is NOT hypocritical. At least they have contributed to the public coffers throughout history . . . Clean and green energy have not paid a dime and yet they come to us ‘Cap in Hand’ . . . Now THAT is hypocrisy ! . . .
“You ignore that the fact that fossil fuel companies have been receiving gross support in the region of USD 45bn per year throughout the 90’s, 2000’s.and early 2010.”
Drivel.
Utter, absolute drivel, in fact.
You really haven’t a clue what you’re wittering about, have you?
And how much has the tax take to the Exchequer been on the sales of the products generated by those tax reliefs?
And then factor in the billions – trillions? – generated by the use of the petroleum products, energy and transport facilitated by them?
Some orders of magnitude greater, I’ll bet.
Whereas the take from the “Unreliables” subsidies will be absolutely zero!
Funny how you Greenies never seem to have noticed those, in the same way you never factor in the cost of the thermal plant needed to keep the country going when the sun isn’t shining and the wind isn’t blowing.
Mendacious or what!
That you think that renewable energy will not be taxed in the future is questionable. And that you ignore the hundreds of billions in support that the fossil fuel industries have received over the last 40 years is also I think shortsighted. https://read.oecd-ilibrary.org/environment/inventory-of-estimated-budgetary-support-and-tax-expenditures-for-fossil-fuels-2013_9789264187610-en
“That you think that renewable energy will not be taxed in the future is questionable.”
It will have to make a profit before that can happen!
Nuclear has never made a profit, and if you include the health service costs responding to air pollution as a consequence of fossil fuels, then we are looking at an even even bigger losses for the fossil fuel sector. https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2020/Apr/IRENA_Energy_subsidies_2020.pdf
Last year globally, fossil fuel subsidies are were $5.9 trillion https://www.imf.org/en/Topics/climate-change/energy-subsidies
Please stop calling those that present the bigger picture as mendacious greenies. The lying here is those that claim renewables are receiving more support than any other energy sector previous to it. Governments have always heavily supported the energy markets wherever they are. Please provide per-reviewed data published at a governmental level (like I have been doing) that disputes this.
“Please stop calling those that present the bigger picture as mendacious greenies. “
That’s the polite version!
There are maximum half a dozen countries, none in Europe, that actually subsidise fossil fuels. Everywhere else hammers them with taxes at point of sale, not to mention corporation tax on any profit and all the taxes and social security contributions of their employees.
There are answers to all your objections to environmentally friendly adaptations.
It is not inability, it is unwillingness. And many of you are fighting against change because you have skin in this game.
We don’t care about your shares, your investments, your greed.
Get out of the way, or be remembered as those that condemned the natural world to decline.
If you think there are better things to worry about than the environment, then answer this:
Where does the air you breathe, the food you eat, and the water you drink come from?
You can’t treat the natural world like a toilet, and expect long term survival in your future. I hope none of you had kids…they won’t thank you.
Quite right ! I resemble that remark . . . THAT is why I advocate HONEST discussion with ALL the cards ON the table . . . ALL the clean green initiatives are more harmful to Planet Earth than what we are currently doing . . . Scrubbers ,Electrostatic Converters and Nitrogen oxide burners ARE the clean alternatives on ALL smokestacks . . . Environmentalists NEVER advocate these because that would mean crawling into bed with the Enemy . . . So they instead recommend things that pollute the planet even More than the status quo . . . please Sir read this first Before you lose your load again . . .
https://www.academia.edu/76965285/Clean_Green_Energy_and_Net_Zero_Fairy_Tales_on_Steroids
From the oil and gas sector’s point of view . . . the subsidies for exploration can be seen as ‘return on equity’ . . . The solar and wind industries have NEVER paid a dime . . . yet they are subsidized up the ying yang for what can be seen as little more than a Fraud on the innocence or ignorance of Government and the Media who do not have the technical skills to analyze or do the deep background checks necessary. Solar and Wind and ALL Electric transportation have a larger ‘Carbon Footprint’ than oil and gas . . . IF you take the time to check the FACTS . . . Worst of all, however is the extraneous pollution produced with solar, wind and EV component production . . . ALL swept under the ‘Big Green Rug’ . . .
https://www.academia.edu/76965285/Clean_Green_Energy_and_Net_Zero_Fairy_Tales_on_Steroids
“I hope none of you had kids…they won’t thank you.”
I have both children and grandchildren actually, and I don’t want them to freeze and starve in the dark to assuage the silly guilt trips of scientifically illiterate bedwetters like you.
In any case, it is highly apparent that increasingly the major contributors to CO2 are in China and India, and that a very significant proportion of the real pollution stems from the extraction and processing of the materials that are necessary to build the white elephant “unreliables” that you and your misguided associates have been conned into believing are some sort of panacea for a non-existent problem, so take it up with them, why don’t you?.
Amen to that !