From The Daily Sceptic

By Paul Homewood

Household energy bills are on course to rise by hundreds of pounds this decade because of ballooning green levies, the country’s biggest electricity and gas suppliers have warned. According to the Telegraph:

Senior executives from Octopus Energy, British Gas owner Centrica, E.On, EDF and Ovo urged Ministers to urgently address levies that pay for Net Zero-related costs, which they said are one of the main factors driving bills higher.

Speaking to MPs on a Parliamentary committee on Wednesday, Rachel Fletcher, Director for Regulation at Octopus Energy, said current trends suggest green levies could add around £300 to a typical household’s electricity bill by 2030.

Energy bosses warned that Net Zero levies were becoming so expensive that they threatened to push household bills higher, even if gas and power prices fell dramatically.

Ms Fletcher, of Octopus, said: “If we continue on the path that we’re on right now, in all likelihood, electricity prices for a typical customer are going to be 20% higher in four- or five-years’ time than they are now.

Ed Miliband has dismissed all of this as “speculation”, but this is not true. His own National Energy System Operator, NESO, told him that bills would rise substantially when it presented him with its ‘Clean Power 2030‘ report last November.

This was the report that looked into the feasibility of Labour’s plan to fully decarbonise the electricity system by 2030. Below is the relevant table from that report:

Ignore its claim that generation costs will fall – I’ll come to that next.

But it does say that all the other non-generation costs would rise by £25 per MWh, which is equivalent to a 10% increase on bills or £7.5 billion a year.

Much of this extra cost will go to constraint payments to wind and solar farms, paying them to switch off when there is too much wind and solar power on the grid.

Currently these payments only go to remote wind farms in Scotland, because the transmission capacity is not big enough there to bring all the electricity south on windy days. However, under Labour’s plan to triple wind and solar power, there will be many days when there will be more electricity generated than the country can consume as a whole.

NESO calculates that a fifth of all electricity produced will have to be either constrained or exported to the continent at a huge loss. The latter is unlikely because the Europeans will also have the same problem of too much wind.

On top of constraint payments, tens of billions will need to be spent building storage capacity and expanding the grid to bring power from Scotland and the North Sea to the parts of the country where the demand is. Ofgem has already put a cost of £80 billion on this, all of which is needed to cope with the massive expansion in renewable energy.

Returning to NESO’s claim that generation costs will fall, this was merely deceitful smoke and mirrors. It has assumed that higher carbon taxes will push up the cost of gas power, which in turn appears to make renewable energy cheaper:

Excluding carbon taxes, the current cost of gas power is around £50 per MWh, not the £123 per MWh it claims. Given its own admission that wind and solar costs between £71 and £83 per MWh, it is clear that generation costs will increase, not fall. (Its figure of £83 per MWh is already out of date, as Miliband has offered £117 per MWh for new offshore wind projects in the latest subsidy auction round.)

Miliband’s spokesman ignored these very real issues raised and instead commented:

Wholesale gas costs for households remain 75% higher than they were before Russia invaded Ukraine in 2022, and the main reason energy bills remain high.

The only way to bring down energy bills for good is by making Britain a clean energy superpower, which will get the UK off the rollercoaster of fossil fuel prices and onto clean, homegrown power that we control.

Gas prices are certainly 75% higher than a decade ago, but general inflation has also risen by a similar amount. In real terms, gas costs no more now than it used to. Green levies are the reason why electricity prices are so high, not the price of gas.

As Claire Coutinho neatly described in her conference speech last week, Ed Miliband wants to take out a fixed-rate mortgage at 11% interest, because he does not want a variable one at 4%!

Except that we will pay the bill, not him.