Government denies press claims on £200 ‘green tax’ cost
- 01 Aug 2011, 11:00
- Neil Roberts
Recent media claims that government energy and climate policies
are adding £200 to household energy bills are "
untrue" the Department of Energy and Climate Change said
DECC was responding to a barrage of recent claims about how much
climate policies are contributing to fuel bills.
The Mail in particular
claimed (as reported in
detail by the Carbon
Brief) that DECC energy efficiency and carbon reduction policies
are adding around £200 a year of the average energy bill. This
figure came from Lord Lawson's skeptic lobby group, the GWPF, but
didn't seem to accord with estimates from Ofgem and DECC.
Now DECC have for the first time publicly commented on this
figure. A blog post by DECC economic advisor Christalla Kyriacou
"Recent reports in the media have
claimed that DECC's policies to promote energy efficiency and low
carbon energy are currently adding £200 to the average household
energy bill ... This is not true.
"Analysis by both DECC and the
independent regulator, Ofgem, puts this figure at around £70 to £90
(or 7% to 8%)."
The post provides the DECC calculation for what they say the
real current price impact on energy bills is:
"So what's the right
To determine what the impact of policies is on the two bills
identified (based on DECC's July 2010 estimates), the following
figures need to be applied:
• Policies add 4% or £1/MWh to the average gas
price, taking it up to £36/MWh. This means policies represent
1/36=4% of the average gas price and bill in 2010.
• Policies add 14% or £15/MWh to the average
electricity price, taking it up to £122/MWh. This means that
policies represent 15/122=12% of the average electricity price and
bill in 2010 (not 14%).
Applying these to the same bills we get (figures may not add due
4% of £608 = £22
12% of £424 = £51
£22 + £51 = £73
(or 7% of the average household's dual fuel bill)"
Finally, Ms Kyriacou explains what these costs are paying for
and why DECC believes "the net impact of these policies on a
household which takes up an energy efficiency measure under these
schemes will likely be to reduce their energy bill."
DECC's statement should be welcomed because it means these
government figures can now be interrogated and assessed in more
detail. By contrast, the £200 claim has still not been sourced.
Whether the Mail, and
other papers, now review the figures they use in light of this
new information remains to be seen. Energy bills are likely to rise
over the coming years, because of both rising fossil fuel prices
and government moves to replace energy infrastructure. More
transparency and accuracy in the way the issue is discussed will