Panorama on energy bills: a look at the sources
- 08 Nov 2011, 16:00
- Robin Webster
With the energy debate often clouded by dodgy figures, opaque
reports you can't get hold of and the unreferenced opinions of
lobbyists, activists and analysts, Panorama last night had an
opportunity to provide some much needed clarity.
The programme promised to answer the question: "What's fuelling
your energy bill? Profit or policy?". Well, their
enthusiastic answer was that it is green energy policy that are
responsible for energy bill price hikes.
Other commentators - including Damian Carrington at the Guardian
- have already pointed out the
aspects of the question that Panorama failed to consider in
making its case. Chief amongst these is
analysis released by Ofgem just a couple of weeks ago, which
showed that energy bills have risen over the last decade largely as
a result of increasing
gas prices.
Following our interactions
yesterday with KPMG, we have taken a look at some of the
sources which Panorama cited in support of its argument, and
detailed them below.
Figures cited in the programme:
Many of the figures cited in the programme are difficult to
analyse.
Panorama cited a Citibank prediction that energy bills will rise
to £2000 by 2020. We have tried to find the source for this today
in order to understand the projection - so far Citibank haven't
pointed us to it, although they did say they were very busy. (We
will update this blog if and when they do so.)
The programme also noted "research by the price comparison site USwitch" which suggests that
energy bills will rise to £3202 by 2020. USwitch told us that they
calculated this figure by basing future price trends (2012 - 2020)
on the trends over the last few years (2004 - 2011).
In citing both of the figures cited Panorama stated that
"Whatever the precise level of your
future bills, one reason for their acceleration skyward is fairly
straightforward. Sadly, green energy isn't yet cheap energy."
It may well be the case that green energy measures will add to
energy bills in the coming years (although the Government contests
this). Panorama, however, gave the strong impression that both of
the 'higher' figures cited above, from Citibank and Uswitch, were
strongly influenced by the cost of green measures.
Obviously we can't assess the Citibank figures. We asked USwitch
if their analysis of bills running up to 2020 was particularly to
do with investment in renewable infrastructure. Their answer was
that it wasn't.
Panorama suggested that switching to more gas and nuclear power
generation could be a cheaper option, an argument sourced to a new
report from KPMG which was
due to be launched this week. As we noted yesterday, however,
KPMG are currently being somewhat
coy about how they got their conclusions, whether they have
finished the report, and when they are planning on launching it. So
again, we can't assess these figures.
The commentators:
The programme relied on a variety of commentators to make warnings
about the costs of renewables and 'green' policies. These included
Simon Less, introduced by the programme as an "Ex-Treasury official
(1998 - 2007)". More recently, Less is the current head of
environment and energy at Policy
Exchange, a
think-tank which advocates free market and
localist solutions to public policy questions, and
opposes renewables targets. (His affiliation with Policy
Exchange was not mentioned by Panorama.)
Another contributor was Peter Atherton of Citigroup, who described
offshore wind as "eye-wateringly expensive". Citigroup released a
report last Friday, which has apparently been
distributed to companies around the world, criticising the
expansion of renewables in Scotland. (Other companies have
disagreed with their analysis.)
In discussing future price rises, Panorama also touched briefly on
the potential for energy efficiency measures to bring down
household bills. The programme introduced predictions by the
Government that energy efficiency measures will lead bills to fall,
rather than rise, by 2020.
We were then introduced to a family who have undertaken energy
efficiency measures in their home, but for whom paying energy bills
is "increasingly a struggle". The householder interviewed added
"...I think the days of cheaper energy
and things are over. The sooner everybody realises it, and we start
planning for that, the better."
This is a good point. But presenting it as a response to DECC's
analysis (as the programme did) is questionable, given Ofgem's
suggestion that gas is largely to blame for the current high state
of fuel bills.
Panorama didn't actually examine the thorny issue of whether
energy efficiency can help keep bills lower - we heard no more
about energy efficiency. Instead, energy academic Dieter Helm made the
case that gas prices may fall in the future, making renewables
relatively more expensive. The unstated assumption - which Helm
has
frequently promoted - is that indigenous production of
shale gas will be the cause of that. Fair enough - it's a point of
view. Both a
UK Parliamentary Committee which looked into the question
and
DeutscheBank have concluded that shale gas is unlikely to
have a dramatic impact on gas prices in this country, but we did
not hear from them in the programme.
Identifying a polemic
Last night's Panorama was an accomplished piece of polemic. It
started with a thesis, and setout to find the arguments to prove
it.
Some reasonable points were made, and some interesting questions
hinted at - should we be persuaded by DECC's argument that energy
efficiency measures will help restrain price rises in the future,
for example.
But arguments against the views of the experts and reports cited
were given no space, or not even identified. The programme's
conclusion was made abundantly clear from the start, with extensive
use of dire warnings about the cost of green technologies, and
scenes set in gambling dens.
In this context, the meaning of the figures we've mentioned
(which we can't interrogate, and viewers certainly wouldn't have
been able to at the time) was not made clear. The failure to
be clear about the role that gas prices in particular have played
in driving costs to consumers up is hard to understand. There's
taking a particular line on something, and then there's just
missing a huge chunk of the story.
Polemic is hardly unusual in politics, and energy politics is no
exception. But when other media sources (in particular the
Daily Mail group) have been so successful in producing it, we find
ourselves wondering if this is really what we need from the BBC's
flagship investigative reporting programme. Pehaps a more genuinely
discursive programme on rising energy costs and energy policy would
have been a more useful contribution.
UPDATE 9th November, 1pm: The presenter of the
programme, Tom Heap, has
responded to criticisms of his programme on the Guardian
website. It is also worth looking at
start of the comments section, where Damian Carrington has
written a response to his piece, clarifying where they disagree.
UPDATE 29th November: Citibank came back to us with an
explanation of their position on 10th November. They said: "Our
actual position is that meeting the 2020 targets could add between
30% to 50% to household fuel bills. Panorama did their own
calculations around that." We asked them for some further
explanation on where their figures came from, but to date have
received no reply (apologies for the delay in writing this
update!).