Switching to green power could add £29 billion a year to household bills
By Paul Homewood
h/t Paul Kolk
Even Emma Gatten has to admit the truth!
Switching to green power could add £29 billion a year to household bills, analysis suggests.
And the net zero investment could see the poorest households £700 worse-off, according to the Resolution Foundation analysis.
Cheap green energy for homes and electric cars has been promised on the basis of low interest rates to pay for the upfront investments in renewables and grid expansion, the foundation said.
But the costs of borrowing have spiked since the energy crisis and could remain high, increasing costs for the net zero transition, which are paid through household bills.
If today’s higher rates of around nine per cent continue, it could add £29 billion a year to household energy bills in 2050, the foundation found.
That would be an average rise of £400 in 2050 compared to 2019, before the energy crisis. Energy bills would still be lower than 2023, because of recent price shocks.
The costs would hit poorer households disproportionately, mostly because they are less likely to benefit from lower transport costs through owning an electric vehicle.
The poorest fifth of households could face an increase of £700 compared to 2019 prices, a rise of 40 per cent.
“Interest rates could remain high and that could cause issues, both in terms of the pace of building things, but also the implications on household finances as well,” said Jonathan Marshall, senior economist at the Resolution Foundation.
Switching to green power for homes and cars to meet the UK’s net zero by 2050 target is expected to require a four-fold increase in investment over the next decade to build new wind and solar farms, and expand the grid to account for electric cars and heat pumps.
The Government offers new wind farms a guaranteed price for their electricity, which has dropped from £164 per megawatt hour in 2014, to just £51 in 2022.
But last year, it failed to secure any new offshore wind projects after the industry said the prices it offered were too low, given rising costs of finance.
“Cleaner energy could be cheaper energy, if interest rates return to the low levels seen during the 2010s,” said Mr Marshall. “But we can’t count on that being the case. If interest rates stay high, energy costs will rise rather than fall in the years ahead.”
The report calls for the Government to focus on building the cheapest renewables, in particular onshore wind, to keep costs down.
It also says the Government should consider a social tariff to help the poorest households pay for energy costs in the future, and look at shifting some of the costs of the energy transition into general taxation rather than bills.
https://www.telegraph.co.uk/news/2024/04/22/switching-green-power-net-zero-onshire-wind-bills/
A few points:
1) Current interest rates are not “high”, as the report states. They are actually normal in historical terms.
They have been artificially low since 2008, thanks to QE, which has effectively operates as a subsidy to renewables, paid for by savers.
2) £29 billion works out at over £1000 a year per household, not the £700 claimed.
3) Gatten states “The costs would hit poorer households disproportionately, mostly because they are less likely to benefit from lower transport costs through owning an electric vehicle”
Has nobody told her that EVs are much more expensive to buy and run?
4) Onshore wind is not as cheap as claimed, because of its greater intermittency.
5) The report refers to wind/solar and grid upgrades. The figures therefore exclude the costs of all of the storage and back up capacity needed
6) Talk of social tariffs and transferring costs to general taxation is no more use than rearranging the deckchairs on the Titanic.
7) The figure of £29 billion of course only relates to the power supply.
On top of that can be added all of the other costs of Net Zero, including:
- EVs
- Heat Pumps
- Hydrogen
- Costs for industry of decarbonisation
- Insulation
It is not difficult to see a figure of at least £50 billion when everything is taken into account.
Comments are closed.
NOT A LOT OF PEOPLE KNOW THAT 
Times how many millions of households?
Way better than £29 billion.
And why do major publishers do sob stories? Do they think their readers are that shallow . . . okay, maybe they are. Their decadent readers aren’t concerned about themselves, but they’ll get worked up over these imaginary people. So much destruction in the name of 3rd parties.
It’s £29billion per household to get to Nut Zero (money become meaningless as the money-based economy collapses).
The simplest way to describe a Nut Zero economy … as there is no viable way to absorb CO2, so anything that emits CO2 ends, is this: an economy without metals and without any petrochemicals/plastics.
The last time we had anything even approaching that was well before the 18th century when almost the entire woodland of Scotland was cut down to fuel the growing industrial revolution. So, that wasn’t sustainable.
With the current UK population, Nut Zero requires us to enter a new stone age … as stone will have to replace metals. For obvious reasons, that won’t happen, but imagine everyone is as stupid as the BBC and actually went along with it … after about 65million have died, we’d then go back to an economy like the middle ages … but unfortunately without any of the skills necessary to live in the middle ages (hence the excess deaths).
But, that wouldn’t last long, because there are plenty of countries who couldn’t give a fig about Nut Zero … and they would just take over the UK, slaughter anyone who refused to accept fossil fuels and turn us into a massive farm producing food for them.
So, however it goes … Nut Zero is never happening.
It will also add £billions to the bills of businesses which will then, compounded through the production and supply chain, mean higher prices for consumers. Higher prices means more paid in VAT too.
We need a rebrand Net Poverty.
Like the rebrand, Nett Poverty, but it hits the issue squarely on the head.
If you decarbonise and move your industrial production overseas, what is left but mass unemployment, if you then increase energy costs at home, suppliers will have to increase prices, so energy UP, prices UP, unemployment UP, standard of living DOWN, poverty UP, homelessness due to inability to pay from benefits UP, so on balance Nett Zero brings absolutely nothing but misery for the masses while ensuring that the gulf between the Have NOTs and the Have it ALLs grow, so some could argue that the majority will benefit from the levelling up- equally poor. And guess what, none of this action to Save the Planet will change a thing except that we will truly be Nett Zero- no energy- no emissions.
All very valid points, Paul. My back of a fag packet calculation is here:
For the 40-eleventh time, it won’t cost trillions. Cos you won’t have trillions. A Net Zero economy won’t even have billions.
Exactly. That classic Ferrari costs me nothing because I can’t afford to buy it.
Whenever a journo mentions those two words “Resolution Foundation” I stop reading.
Catching up on posts on Blackout News you can see that Germany is experiencing these costs already. Their ecofascist government removed the subsidies from customers bills and paid it from taxation only to find that they now have an ever increasing deficit. On top of that, Germany is now running a loss on its import/export of electricity having stupidly shut down 3 perfectly good nuclear plants and leaving another 6 idle. A court has now ruled top idiot Habeck must release the details of the decision to close down the plants which must obviously be embarrassing or it wouldn’t have been fought for so long.
In another post there is a faceplant moment in realising that energy from and unreliable intermittent source comes with problems – or extra costs as they are known. A report gives lie to Habeck’s claim that more wind and solar will bring cheaper prices – didn’t Sushi’s little dolly bird Coutinho spout the same nonsense when increasing taxpayer subsidies to windmills? – and calls for the LCOE to be replaced by LCOLC – Levelised Cost of Load Coverage which will include all the back up/storage costs.
Ironically, battery maker Varta is in financial trouble while hydrogen pioneer Hoeller Electrolyzer has gone bankrupt, as has tube maker Rohrwerk Maxhuette. Tunnelling machine making Herrenknecht is yet another company warning the deaf ears of the government that industry is struggling while Continental is 1200 jobs.
Although H gas is more expensive than L gas, the final price for consumers should not change. The reason: With H gas, less gas is required for the same heating output. Since billing is based on the amount of energy consumed, the cost structure for the end user remains almost unchanged. This ensures that the switch to the more efficient H gas does not have a negative impact on household gas bills.
The above comes from a post where 6 states in Germany will be forcing people to heat with hydrogen not natural gas. Given all the lies about costs does anyone seriously believe that there won’t be a big increase in cost from a switch to hydrogen?
What’s a life worth? £3M?
EVs burning down car parks. H2 houses exploding. Exciting times.
This is garbage. The price to the consumer is based around the cost of getting the fuel to the consumer, not its energy content. If ot costs three times as much to get it to me and I use half as much, it’s more expensive.
See below
https://ipsenglobal.com/knowledge-center/conversion-from-l-to-h-gas-what-does-this-mean-for-my-heat-treatment-operation/
In fact gas is almost always sold on an energy content basis, with the quality constantly sampled and measured. In the US you pay $/MMBtu, the UK wholesale market is in p/therm with 10 therms=1MMBtu, although the retail market now bills in p/kWh, while on the Continent the wholesale markets are in €/MWh. There can be noticeable differences in calorific value depending on the processing at gas treatment plants, which will reflect in part how economically attractive it is to strip out ethane, propane, butane and C5+ condensate while meeting minimum spec.
Bills will state the calorific value of your supply, since domestic metering only measures volumes. There are also temperatures and pressures to be taken into account
https://2ea.co.uk/the-importance-of-pressure-and-temperature-compensation-of-natural-gas-meters/
In the US long distance pipelines have to be paid for, along with the energy used for pumping, giving rise to published citygate prices. Something similar actually happens in the UK, although the billing is much more hidden from consumers, but in fact the base gas price is at a notional National Balancing Point, and there are at least regional locational price adjustments paid by suppliers together with allocation of network costs.
H gas is higher calorific value ordinary methane: it is NOT hydrogen. L gas is lower calorific value gas which has a high CO2 content (~30%) historically produced from the giant Groningen field, which the Dutch government has virtually closed down following seismic tremors. It has its own dedicated pipeline network that covers part of Germany and part of Belgium as well as the Netherlands. With production having been wound down over several years, the Dutch had resorted to importing LNG and downgrading it with nitrogen injection. Moves to switch the L gas network to methane have long been planned. It requires different appliance burners, much as when North Sea gas replaced Town gas in the UK.
Worth pointing out that if hydrogen were to be introduced it would lower the gas calorific value, being only a third as energy dense as methane. In more than token volumes it leads to the need for different burners, and correspondingly higher delivery volumes.
£29 billion a year
If batteries are the solution for back-up at an installation cost of approx 21 trillion ££££££ – as previously posted on this forum by John Brown – then 29 billion £££ per annum won’t touch the sides
When the lights go out and the electorate are on the MP’s lawns with torches and pitchforks they will wake up and get the message.
That is a wretchedly disingenuous DT headline —or headlie as it should be called.
The £29billion refers ‘only’ to the outcome of the rise in interest rates, whereas the headlie refers to “Switching to green power….”, within which the £29bn is petty cash by comparison.
And CO2 doesn’t affect the weather. I propose that EV owners should be forced to charge their cars between about 10.00 am and 1600 daily when solar panels are producing at a time of day when demand is so low.
It could be managed by the ‘smart chargers’
most EV car owners charge their cars overnight at their homes when rates are lowest
As I write Green Power is producing 3.6GW about a tenth of demand. Isobars fairly flat across Europe.
Further to – a check across several European capitals shows much 5 mph wind. So “it’s always blowing somewhere” is cr@p
Further to – a check across several European capitals shows much 5 mph wind. So “it’s always blowing somewhere” is cr@p
Net output on a per turbine basis could be interesting reading; my guess is that the operators will have this info easily accessible (to the operators)
The Resolution Foundation is another Marxist organisation working to cause the destruction of democracy and capitalism through impoverishment and social chaos.
So their estimate that green energy and Net Zero will only cost £29bn/year is deliberately a tiny fraction of the real cost, not that it is in any way achievable.
And never forget that both Marxists and climate activists believe the ends always justifies the means and that there is no limit to the amount of money which the democratic West should spend on saving the planet.
That is the plan isn’t it?
However these folks are not modern day Robin Hoods. It is a wealth transfer from the middle and lower class to the already eye wateringly rich.
The Grauniad had a small piece on this but made sure to say
“However, it said the green transition would still save consumers billions of pounds compared with current sky-high energy costs and slowing the pace of transition was not an option”
It lives in it’s own little universe.
In the USA over the last 25 years residential electricity has averaged an increase of only 2% per year.
Electric GENERTION represents onl33% of the residential cost. The rest is transmission, overhead, and of course PROFITS for our privately owned utilities.
German households typically pay about 9% of their income for all energy, that would include petrol and gas and electricity. Please compare that to your own costs
There are co-ops in many parts of the country, as grew out of the REA. Non-profits.
Is there something wrong with PROFITS?