Where are the Daily Mail getting their numbers from?

  • 14 Jul 2011, 12:00
  • Christian

The Daily Mail has been on an anti green energy roll recently - but where is it getting its numbers from?

Last month the paper claimed in a front-page headline and subsequent series of articles that green measures are currently adding £200 to household energy bills. After Carbon Brief highlighted that the £200 figure was based on unsourced claims by the Global Warming Policy Foundation, the Mail dropped the claim in favour of Ofgem's estimate of £100, or 10% per year on energy bills - but continued to reference back to their original articles, and quote the GWPF extensively, in their coverage.

Yesterday, the Mail's front page upped their claims a bit further - with a banner headline is

"£1,000 bill for green energy: families face huge annual levy to appease the climate lobby"

The Mail's coverage follows the launch by Chris Huhne of the Electricity Market Reform (EMR) White Paper on Monday. The reforms of the sector are intended to put in place power supply infrastructure intended to replace ageing power stations, put the UK on a green energy track, and prevent blackouts (something else the Daily Mail has been known to get worried about in the past).

As was reported across the press - for example the Telegraph, the Mirror, the Express and the Evening Standard - the Department of Energy and Climate Change (DECC) estimated that the reforms of the electricity market will add £160 to the average household electricity  bill.

The Mail however chose to highlight a higher figure. The paper's article said that:

"...analysts at the Unicredit bank believe that the true cost will be even higher, with energy bills set to rise by around £1,000 a year - up to £2,000".

So where does this figure come from? It has proved somewhat difficult to source. A phone call to Unicredit bank press office produced an emailed copy of the bank's last paper on the pan-European electricity market, which referred to the bank's views on the UK Electricity Market Reform announced by Huhne on Tuesday. The document however, made no mention of the impact on domestic energy bills of the EMR.

There is another possible source. The author of the Mail article, Sean Poulter, wrote an article a few days ago on the same subject, which included the statement that

"Research by UniCredit, a Europe-wide banking organisation, says building wind farms and power stations and installing smart meters will send bills rocketing.

"It said: 'According to our analysis, a typical UK energy bill could rise from the current level of £1,000 per year to over £2,000 per year by 2015.

'As investment occurs, bills could double every five years until 2020, in our view.'"

The identical quote by Unicredit originally appeared on a blog by the FT in January of this year. The blog (which began "here's one for the tabloids to get stuck into...") said that Unicredit's research attributed the £1,000 bill to "cost pressures from environmental and social programs and rising network charges". It referred to modelling underlying these figures. It has not been possible to obtain any further information from Unicredit as we were informed that the relevant person is away for all of this week.

So it is possible that there is some basis for the £1,000 figure. Even if this is the case however, it is clear that it is something of an outlier as an estimate. The Mail felt the need to note in its article a quote from an expert who said that he had not seen "any credible analysis" to substantiate the figure "unless a complete mess is made of the financing".

The Government announcement estimated that electricity bills will go up £160 by 2030. In discussing the Government's figures, the Mail fails to note in its article something that DECC also made clear - bills are going to go up irrespective of the introduction of the reforms proposed. DECC's analysis makes clear that:

"Average consumer bills are estimated to rise by around £200 from 2010 to 2030 without reform. Electricity Market Reform will limit this increase in bills to around £160, a saving of £40 per customer on the average bill." (Section 7.30, p120)

And the Mail says that DECC's figure of £160 on the average household bill

"...relies on the assumption that families cut their annual energy use in the home by 30 per cent over the same period".

We were informed by DECC however, that their figures are based on a 10 percent reduction in energy use in homes, not 30 percent.

The Mail article concludes by quoting (again) the director of the Global Warming Policy Foundation, who describes the Government's figure of a £160 rise in electricity bills as

"...fanciful, this has just been plucked from the air".

The Government's figures are based on modelling by Redpoint Energy, outlined in different levels of detail in documents on the DECC website. In contrast, the GWPF have not yet sourced figures they promoted in the Mail last month. And the figures in this latest Mail article are at best extremely difficult to source.

This article was altered at 3.30pm on Thursday 14th July after to reflect the fact that the DECC predictions are for household electricity bills and not energy bills, and so will not for example be impacted by changes in the prices of gas. This makes the figures quoted in the Mail even more difficult to compare to the DECC figures, as they are for energy bills a whole.

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