Blog

Confidential House of Commons research on renewables and fuel poverty makes it into the Sunday Telegraph

  • 20 Jun 2012, 15:10
  • Ros Donald and Christian Hunt

Confidential research undertaken by the House of Commons Library and shown to the Sunday Telegraph suggests payments to wind power companies through the Renewables Obligation (RO) - a premium paid to renewable energy generators to help them compete with established players in the energy market - mean 50,000 more households are in fuel poverty than would otherwise be.

Is it right? There's no way to tell. Despite being undertaken by the House of Commons library and cited in a national newspaper, the research is not in the public domain - a bit of a blow to transparent politics. 

Here's what the Sunday Telegraph said at the end of an article on wind subsidies published on Sunday: 

"Subsidies paid to windpower companies are forcing up to 50,000 households a year into fuel poverty, according to analysis of government figures by the House of Commons Library.

Increased electricity costs because of all subsidies paid to all renewable sources of energy have pushed 100,000 families into fuel poverty, defined as the need to spend more than 10 per cent of household income to maintain a satisfactory heating regime". 

According to the Telegraph, "wind power payments" are estimated to account for about half of all renewables subsidies. 

Who commissioned the research?

According to two sources with knowledge of the research, the analysis was prepared by researchers at the House of Commons library for Chris Heaton-Harris, the Conservative MP for Daventry. He has been campaigning against wind subsidies for several months - earlier this year he organised a letter signed by 100 other MPs calling for subsidies to onshore wind farms to be "dramatically cut".   

And last week, Heaton-Harris asked energy and climate change minister Greg Barker if he'd assessed the effect of the Department of Energy and Climate Change (DECC)'s wind and renewables policies on fuel poverty. DECC hadn't. 

This may have prompted Heaton-Harris to turn to the House of Commons Library, which can assist MPs with research. We tried to speak with Mr Heaton-Harris to find out whether he commissioned the research. But although he eventually responded noting that our deadline had passed, he didn't confirm the work had been done for him, or send us any details. 

Transparency

The House of Commons library produces "confidential answers to enquiries on the full range of subjects of interest to Members of Parliament and Commons Committees". It told us that it was entirely up to the MP who commissioned the research as to whether they wanted to release it. 

Clearly in this case, someone released the research to the Sunday Telegraph but no further - a somewhat depressing development for the transparency of the energy debate. It makes the figure difficult to understand - we don't know how it was calculated, and we don't know whether the Sunday Telegraph referenced it accurately. 

But even if we can't get the research itself, the Sunday Telegraph says it was based on government figures. We've done an accounting exercise to see how it was reached. 

Wind subsidies 

A DECC answer to a parliamentary question posed by Chris Heaton-Harris suggests that the total amount added to an electricity bill by payments to support renewables was £18.20 in 2010-2011 - £18 of that goes to the Renewables Obligation and 20p to feed-in tariffs.

Fuel poverty 

According to the most recent DECC fuel poverty figures 4.75 million households in the UK were classed as being fuel poor in 2010. Between 2009 and 2010 this number fell by 750,000, from 5.5 million to 4.75 million. 

How does one part of an energy bill push people into fuel poverty? 

The definition of fuel poverty used by the government is (broadly) that a household which spends more than 10% of its income on energy costs is fuel poor. 

So, although we can't know for sure, we think the House of Commons library analysis must have concluded that if the average energy bill was £18.20 lower, 100,000 less households would be spending more than 10% of their income on energy. 

The 50,000 figure 

The Telegraph then says that wind power accounts for around half of RO payments - an estimate a recent report from the Grantham Institue also makes - and concludes that 50,000 households in fuel poverty now wouldn't be if their energy bills were £9 a year lower. 

Well, if the missing calculations have been done correctly, this may be right. But is it reasonable to say that this payment is "forcing up to 50,000 households a year into fuel poverty" as the Telegraph does? At the very least, this seems to be missing the wider picture. 

Renewables Obligation costs are not rising rapidly - total costs to consumers from the RO have risen by £3 since 2009. But other factors are driving bills up rapidly. Most notably, wholesale energy prices have risen a lot, to the point where gas wholesale costs now count for over 48 per cent of the average UK domestic energy bill, according to Ofgem. 

On the other hand, as we noted earlier, the number of households in fuel poverty fell by 750,000 between 2009 and 2010. So it's clear that there isn't a straightforward relationship between these small margins on bills and fuel poverty levels, as the Telegraph's use of these figures might suggest. 

FInally, it's worth noting that (purely in terms of assessing the calculation behind the 50,000 figure) £9 is a relatively small amount compared to an average combined gas and electricity bill of £1,310.

In this context it seems odd to us to confidently isolate one component of an energy bill and blame it for a very precise number of fuel poor households.It's not just odd to do this for wind payments - it would be odd to do it for any small cost on an energy bill. The best that you can say about it is that it doesn't give the whole picture. 

Essentially it seems that the Sunday Telegraph is talking up wind subsidies ahead of a government review of Renewables Obligation payments. Addressing fuel poverty should be a priority, and for some people £9 will be a lot, for others it won't. But it's clear that in a newspaper article, "50,000 households a year in fuel poverty" sounds like a much bigger deal than "£9 a year".

Email Share to Facebook Stumble It
blog comments powered by Disqus