Government plans to scrap green energy levies welcomed
APRIL 19, 2022
tags: net zero
By Paul Homewood
Net Zero Watch has welcomed the government’s intention to consider scrapping green energy levies on energy bills.
According to the Daily Telegraph, “government officials are examining whether the controversial levies – used to fund renewable energy subsidy schemes – could be phased out gradually or dropped altogether by the autumn when bills are expected to soar.”
Green levies cost the UK economy about £11 billion a year in total, putting £150 a year on the average household electricity bill, and a further £250 per household on the annual cost of living, a total of £400 per household per year. The levies also depress wages and rates of employment.
Net Zero Watch and a long list of MPs have repeatedly called on ministers to remove these subsidies from energy bills to help reduce the mounting cost of living crisis.
Dr John Constable, Net Zero Watch director of energy, said:
Given the high prices now available in the electricity markets it is evident that wind turbines, solar panels and biomass power stations no longer need any subsidies and should now be able to compete as pure merchant generators.”
Putting renewables on a market basis would also help to reduce system operating costs, and prevent green generators subsidised under the Renewables Obligation from, as is increasingly suspected, taking both the very high market prices and the subsidies, thus generating hyper-profits.
Steve Baker MP said:
In light of the deepening energy cost and cost of living crisis the government seems to be making gradual progress towards a more realistic energy policy. Making the public poorer and colder never seemed likely to survive contact with electors. We can only hope ministers now accelerate reforms to a policy which is socially, economically and politically viable.”
Dr Benny Peiser, Net Zero Watch director said:
It would appear that ministers are realising that billions in subsidies for renewable energy is no longer compatible with the cost of living crisis, threatening the welfare of tens of millions of households and undermining economic and political stability. The longer the Government delays terminating handouts for renewable energy investors the higher the economic and political cost for consumers, businesses and the government.”
Net Zero Watch has published a simple one page factsheet on the cost of the green levies to indicate the scale of financial help scrapping them would be offered to households. — Factsheet: The cost of green levies (pdf)
It will be interesting to see exactly what the government does with the levies – will they simply transfer them onto the Exchequer as public spending, or will they get rid of them completely?
I am pleased they have highlighted the fact that most renewable generators are still raking in subsidies, while at the same time benefitting from sky high market prices.
Below, by the way, is the Factsheet mentioned above: