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Mail doubles impact of green policies on bills, again

  • 20 Feb 2012, 17:00
  • Robin Webster

The Daily Mail have again confused their readers over the amount of an energy bill that is due to social and environmental costs, or 'green taxes'. (We've  been here before.)

On Saturday a  large-ish article appeared in the paper titled:

Official: Green taxes add 15% to your bills: at last, admission of why families are paying so much for energy

From the headline, you might guess that the government has just released some new analysis which finally vindicates the somewhat  misleading reporting the paper has produced on the issue. This isn't the case. In fact the article refers to figures  released by DECC last November, which the Mail devoted a  front-page to at the time.

So what's changed? Apparently nothing.

Electricity prices and energy bills are not the same thing

If correct, the eye catching headline would back up the Mail's earlier assertion that "15-20%" of an energy bill is made up of green taxes.

But the headline is wrong, as the first sentence of the article reveals:

Electricity prices are 15 per cent more expensive than they should be because of green policies, Whitehall officials have admitted.

The Mail has yet again mixed up electricity prices with energy bills.

Here's why this is the wrong thing to do: Most households use both gas and electricity, so the average energy bill is determined by the price of both.

The average household spends more on gas than electricity, and green policies add less to gas prices than to electricity prices - about 5%, according to the figures the Mail is quoting.

Hence, a 15% rise in the price of electricity doesn't mean a 15% rise in the overall bill.

Screen Shot 2012-02-20 At 16.34.04

Figure 1: Proportion of the average energy bill accounted for by electricity and gas. Source: DECC projections, November 2011

The Mail should have got this right, because the DECC figures it quotes make the point quite clearly. The DECC report states, in the first point of the summary, that

The costs of energy and climate change policies are estimated to make up around 7% of the average household energy bill - not accounting for the energy they help people save.

Confusing energy bills with electricity prices is a basic error, and one that we know the Mail are aware of, because we've written to the editorial staff about it before.

Once again, the effect of the mistake is to double the amount that 'green policies' allegedly add to a bill.

Future bills

The article also makes predictions about the future, and contrary to the DECC analysis assumes that energy consumption will not fall at all in the future.

The Mail suggest that "£200 could be added to the average energy bill by 2020", a statement that appears to come from assuming energy usage will be exactly the same in 2020 as it is now, and comparing bills with and without green policies on that basis.

Here they are on safer ground, because there are plenty of others who agree the government's predictions about energy efficiency are over-optimistic.

This projection is based on government figures, but assumes the government's energy efficiency plans will have no effect to reduce energy use. Fair enough - it seems like an open question whether the 'Green Deal' will effectively cut energy use over the coming decade.

But weirdly, the Mail appear to have missed a trick - DECC's analysis actually suggests a theoretical rise of £280 to the average energy bill as a result of green policies by 2020, if energy efficiency measures are ignored - as the Mail has itself pointed out in previous coverage.

DECC has defended their assumption that policies will cause energy use to fall,  arguing in a blog that even householders that don't take up an insulation measures and are not eligible for a 'Warm Homes discount rebate' will see a rise in their bill of only £44 by 2020.

But again, these predictions are based on accepting that government policies (like a universal roll-out of Smart Meters, or a fall in wholesale electricity costs as a result of more power coming from renewables) will have a substantive effect, which remains to be seen.

That aside, the article headline, and the claim that green energy measures are currently adding 15% to householder's bills, is, to use the phrase of the PCC editor's code "inaccurate, misleading or distorted information" - words with which we are becoming increasingly familiar.

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