Environmental Levy Update
By Paul Homewood
https://obr.uk/efo/economic-and-fiscal-outlook-november-2022/
Following the Autumn Statement, the OBR have released their Fiscal Tables, including Environmental Levies.
As we can see, the cost of subsidising renewable energy is still going to be considerable, even although Contracts for Difference are expected to reduce energy bills, with market prices for electricity higher than the CfD guarantee.
Over the six year period 2022/23 to 2027/28, the total cost of levies, FiTs and RHI will amount to £56 billion.
The cost of subsidies already paid out since 2012/13 came to £78 billion (see here), so by 2028 we will have forked out £134 billion.
Bear this in mind when the renewable lobby tells us we should have been building more wind farms!
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NOT A LOT OF PEOPLE KNOW THAT 
Are the wind turbine owners still procrastinating in taking up the CfD options? Has there been any change in govt. coercion on this?
Any business that requires a subsidy from taxpayers to operate is not a business in the real sense of the word.
“Any business that requires a subsidy from taxpayers to operate is not a business”
Correct & should be viewed as state owned, therefore no shareholders should receive any dividend until all ‘Loans’ have been repaid. !!
I presume that the OBR assume that new CFDs will taken up promptly, probably including those wind farms who have yet to do so. The forecast will also take account of a forward price curve and an inflation forecast applied to the strike prices. Reduced repayments in the next 2-3 years therefore reflect lower wholesale electricity and rising money of the day strike prices, offset by a marginal lowering of the average strike price from new renewables. The much higher repayments at the end could even be an error on those terms. It might signal an expectation of rising wholesale prices. Or it might simply be that they have failed to notice that the LCCC has yet to index the strike prices from 2012 values for AR4 projects.
The idea that AR4 prices are fictional, and will probably never apply is subject to omerta, as I found when I asked the LCCC to comment on them. “A matter for BEIS ” they said. With REMA ( review of electricity markets, pronounce reamer of consumers) coming up everything will be renegotiated to guarantee wind farms a profit.
Next year’s ‘Outturn’ CfD for 2021/22 will make interesting reading. 😉
Progress can be monitored here
https://www.lowcarboncontracts.uk/index.php/dashboards/cfd/actuals-dashboards/historical-dashboard
Thanks IDAU. 👍
I have written to the LCCC asking when they will publish proper indexed prices for AR4 CFDs. The longer they go on passing off 2012 prices alongside the indexed prices for earlier rounds the more journalists and analysts will be misled, and the more they will mislead the public.
James O’Brien is currently on LBC radio telling everyone how great wind turbines are.
I switched off.
Pity we can’t do the same to the turbines.
I’m planning to keep hammering the argument that over their whole life — mining for the metals right through the whole process to decommissioning and ground restoration (a man can dream! 🥲) — turbines emit considerably more real pollutants and CO2 then their gas-fired equivalent and are considerably more damaging to the environment.
I’m still hopeful that the ER and JSO (et al) foot soldiers will start to understand this and in time turn on those cultists (because ‘cult’ is the only word that really fits the behaviour) who have succeeded in brainwashing them so successfully.
Mike
Thats useful but is that information available as a 1 sheet bullet point summary with appropriate links to the source?
That would then become a real weapon for all of us, otherwise it will be airily dismissed
Probably not. I’m relying in a variety of sources combined with a bit of logic and common sense so always open to challenge. It would certainly be helpful if someone could put some hard figures on any of these statistical claims, not just mine.
There’s a lot of hot air spouted on both sides. I doubt I’m immune! 😕
He is a plank
I see Sadiq Aman has hatched a plan to destroy London
Sadiq Khan
https://www.bbc.co.uk/news/uk-england-london-63754724
Well, they keep voting for him!
Seems there’s another green crime wave in the making. Google UK news solar panel theft. A handful off a domestic roof or 100+ from a ‘farm’.
The eco-zealots have been saying that fossil fuel producers have been subsidised for years so why not renewables. The answer to that is the Greenies’ sleight of hand call tax allowances against normal business expenses “subsidies”. Few of their followers and MSM challenge them over this so the myth grows in to a fact.
I decided to find out more about the subsidies on fossil fuels the eco mob are promoting. I found this and it’s quite a read.
https://www.iea.org/topics/energy-subsidies
Paul would be able to grasp the terminology and concepts better than I but, at first glance, the methodology makes sweeping assumptions. It also depends on what you call a subsidy.
An example could be the price of petrol in Saudi. It’s very low by our standards and the subsidy is deemed to be the difference between, oil in this case, local prices and world prices.
“For economies that export a given fossil-energy product but charge less for it in the domestic markets, the domestic subsidies are implicit; they have no direct budgetary impact so as long as the price covers the cost of production. The subsidy, in this case, is the opportunity cost of pricing domestic energy below international market levels, i.e. the rent that could be recovered if consumers paid world prices, adjusting for differences in variables such as transportation costs.”
You can argue that this differential is a subsidy but surely that would be for the consumer not the producer as the eco mob would say it is. On this point it is fair to say that this is opposite of what renewables receive indirectly from the consumer. On one hand the consumer benefits (fossil fuels) and on the other hand the producers benefit (renewables).
It’s worth a read but be prepared to try to get your head around the terminology.
Thank-you MM for that reference. So subsidy is basically the country government selling oil / gas below current world price. Petrol and diesel was 17p a litre when I worked in Oman but that is called a “subsidy” in world economics whereas the Omanis thought it right that as an oil producer and refiner that the price should be one that they could afford.
In the UK I understand that the government give tax breaks to oil / gas companies for decommissioning costs, but this is because the companies had paid this forward in PRT and corporation tax when the facility was in production. The green lobby of course cite this as a “subsify”.
Is there anything that the green lobby do not lie about?
Perhaps they should be played at their own game. Any windfarms selling above the lowest cost should be reckoned as subsidised.
I think the big point here, apart from the grossly misleading version of subsidies, is that the vast majority of what they determine to be subsidies is to the benefit of consumers whereas the subsidies given to renewables is given straight to the producers.
Re Sadiq Khan and ULEZ, a majority voted against it in a poll. The people have failed the government, a new people should be elected.
The van driving tradesmen from Tier 1 commuter land who live inside the proposed zone and service outer London are likely are not ecstatic about the extension that The Khant is foisting on them.
It would be a relatively trivial exercise to trawl the DVLA database to find disaffected voters.
It’s about time that the tailpipe emissions of vehicles were independently verifiable – I see that LEZ exemptions for two wheelers that were bureaucratically mis-categorised are available.
see: The National Emissions Test Centre
Yeah, I just read a story that they do not want to consider the loss of crops due to windmills killing bats that currently eat insects, or the loss of crops due the the loss of bats and birds already already killed by windmills. The Green Energy People are “NOT” Environmentalists. The Countries, States, Counties, Cities that cover millions of acres of land with Wind and Solar are not looking out for the Environment.
Well, that was a slightly depressing visit to https://www.energy-uk.org.uk/ …
The offshore wind industry apparently requires Gender Champions (yes, it is capitalised)
I daresay that the levy likely funds all those posts
If one took the NHS as a guide on salary – ca. £70k would be the going rate for the task….
They are literally Political Officers, installed in every business to ensure everyone conforms.
The executions will continue until morale improves
Ischia mudslides in the news, blamed on exceptional rain, but they happen repeatedly, and they are inevitable whenever there is heavy rain.
https://www.lyellcollection.org/doi/abs/10.1144/sp322.3