From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

 The OBR have now published their full Economic & Fiscal Outlook, following the new Budget.

As usual, there is a table showing Environmental Levies, which are costs imposed on energy bills as a direct consequence of Government policy.

One way or another, these are all effectively subsidies for renewable energy. Most are directly paid to wind farms and the like, including Renewables Obligations and Contracts for Difference. Capacity Market payments are an indirect subsidy, in the sense that intermittent generation cannot work without reliable generation on standby.

Warm Homes Discount is a rebate for poorer household on benefits, such as Pension Credit and Universal Benefit. It is worth £150 a year and is funded from everybody else’s energy bills. However, this rebate would not be necessary if energy prices were not already inflated by Net Zero policies.

I’ll do a separate post on Sizewell C shortly.

Overall, the cost of what are euphemistically called “policy costs” will increase from £11.8bn last year to £18.6 in 2031/31. (Note – OBR show a cost of £10.5bn for 2024/25. But as they point out, this does not include Capacity Market.)

This is bad enough, but the OBR do not show the full costs imposed on our energy bills by Net Zero. My table below offers a more complete view of things:

When other relevant costs are included, the bill rises to £31.8 billion in 2030/31. This is equivalent to over £1100 per household.

A few notes may be useful:

1) Feed in Tariffs are subsidies to smaller renewable generators. These were always included in Environmental Levies by the OBR, until a few years ago when they were taken out for plainly political reasons. The costs shown are the official numbers supplied by OFGEM for 2023/24.

2) Climate Change Levy, which also adds to energy bills, is shown elsewhere by the OBR.

3) The costs of the Emissions Trading Scheme, ETS, are sourced from John Constable’s review earlier this year:

https://www.ref.org.uk/ref-blog/390-uk-renewable-electricity-subsidy-totals-2002-to-the-present-day

4) System Balancing costs also come from the same John Constable analysis, itself based on official OFGEM data. As with ETS, it is assumed, optimistically, that these costs won’t rise from existing levels.

Even this does not reflect all of the costs imposed on energy bills by Net Zero. It does not attempt to measure the impact on bills of the £80 billion upgrade of the electricity transmission network, which is needed to meet Net Zero requirements.

For years, the crippling cost of Net Zero has been hidden from the public. But it is now getting so big to hide much longer.