Monday, October 14, 2013

Are green taxes pushing up energy bills? (Are they like as 'eck)

Energy Prices are High Because of Green Taxes!! scream the Mail/Telegraph/Express/Murdoch propaganda organs.

They are habitual lying liars and are not to be trusted.

Searching for the back story on energy prices is quite difficult. You have to go to the blogs for a balanced view that tries to look at all the factors, such as the excellent Calum's blog.

Calum gives the breakdown:

As you see, Green Levies form 6% of gas and 11% of electricity bills. And they did not go up by that amount. More research is needed to find that figure.

The vast majority of the bill comes from the wholesale energy price. So what has that been doing?

This above is the wholesale vs retail gas price 2007-2013. Wholesale prices rose from 40 in 2007 to 62 in 2013 - an increase of 55%. Retail prices rose from 550 to 800 - a 45% increase. 
So it would seem from those figures that the increase may be justifiable for gas.

However, those are just points on the graph. to get a truer picture, we need to calculate the full area below the red and blue lines. Note, for instance, how the red line, the retail price, increases from 62-80 (a 35% increase) in response to the spike in 2008, but fails to fall again.

This failure to fall may be down to the fact that the retail prices are "hedged", that is, calculated over longer time periods, in order to prevent frequent changes to bills.

Electricity wholesale prices have changed from 40 to 52, an increase of 30%, but retail prices have changed by 48%. Again, the same caveats apply to interpretation of the figures, but even so, a 30% increase on nearly 60% of the whole bill cannot possibly compare to even a 100% increase in the green levy.

Note, by the way, that EDF has been given a guaranteed price of £90 per MWh, nearly twice as much as current prices. Remember "Too cheap to meter"?

There is another aspect to this. The big 6 energy companies sometimes get their wholesale supplies from supply companies that they own. So they can disclaim responsibility while their subsidiary companies can manipulate the price. 

I have not the time or expertise to do this. There are many qualified journalists out there who could break into the data. But they do not, because editors would rather have Green Levies Killed My Granny headlines than anything reflecting the whole truth.

Blanket levies applied to energy bills are the wrong policy. There should be a carbon tax on energy so that carbon energy prices go up and renewable energy supplies do not. Some of the carbon tax should come back to the poorest in our society especially in the form of energy conservation measures because the poor are hit worst by energy billincreases.

Nuclear subsidies do not appear on energy bills. They are hidden in general taxation.

And another thing. Note that there is a general upwards trend  in electricity prices:

This reflects to some degree the ever-increasing scarcity of the primary sources of fossil energy, the increasing difficulty (not to say impossibility) of extracting ever more from a finite source. 

Note also that the primary fuel source of renewable energy is FREE. Free as in gratis, buckshee, without charge, on the house, complimentary. 

Note also that the prices of PV solar panels are falling with great consistency:

Strange isn't it that no corporate journalist ever mentions these outstandingly obvious facts as he drearily churns out another I-hate-renewable-energy piece?

So, in summary, the claims of the right wing propaganda machine about the impact of "green taxes" on  energy bills is, er, right wing propaganda.

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