Will the Energy Bill really add £178 to fuel bills? Dissecting energy bill numbers
- 27 Nov 2012, 14:33
- Robin Webster
"Wind farms to increase energy bills by £178 a year" announced
the the
front page of Friday's
Daily Telegraph - adding in a subheading that the price rise
will occur under a deal just struck over the government's new
Energy Bill. Since then, other newspapers seem to have used the
figure to suggest that the government's new energy bill will add
around £170 to bills. So is this correct?
The Telegraph article followed an
announcement from the
Department for Energy and Climate Change (DECC) that the
government will be publishing the energy bill this week.
The legislation contains provisions to increase the amount of
energy the UK gets from renewables and nuclear power.
The Telegraph searched out a figure for how much government
policies will add to bills: £178. A closer look shows:
- The claim that bills will go up by £178 over the next two
decades is based on figures from DECC which are a year old. The
figures do not refer specifically to the impact of the measures in
the energy bill;
- The extra £178 DECC calculated is due to a range of factors,
including rising gas prices over the next two decades - it's not
solely attributable to climate and energy policies.
- The same figures show DECC believes energy bills would go up by
a greater amount without new energy and climate policies;
The price rise is not attributable solely to subsidies for wind
farms, as the Telegraph's front-page headline claims.
Given all these considerations, it's perhaps unsurprising that
other newspapers mistakenly started to warn of a bill hike of
around £170 as the result of the new energy legislation.
Let's take a look at the details.
DECC's announcement
Last Thursday night, DECC announced
details of the forthcoming energy bill, designed to revamp the
UK's energy system.
It's worth noting the bill's measures don't
encompass all of the government's energy and climate change
policies. No energy efficiency measures are included in the bill,
for example.
The government press release on the energy bill
wasn't very informative on the subject of how much DECC thinks
the energy bill is going to cost consumers. The only hard number in
the press release says it is limiting consumer funding for
renewables by 2020 to £7.6 billion. A spokesperson for the
department told us it thinks the cost of support measures for
nuclear and renewables on household bills will rise from £20 in
2011, to £95 in 2020.
The Telegraph article gives DECC's figures another
airing
The Telegraph quotes this £95 figure, but it also cites an
estimate for the impact of policies on bills by 2030. The article
says:
"Bills will go up over the next two
decades by an estimated £178 a year under all the Government's
green and fuel poverty policies..."
We contacted the author of the article, political
correspondent Rowena Mason. She told us that the figure is from
DECC's most recent assessment of how much bills will rise under all
energy and climate change policies by 2030. The
report was published in November 2011.
Indeed, this table shows DECC projected that household energy
bills will rise by £178 between 2011 and 2030, under its "Bills
with policies" scenario:
Source: Table 1, Estimated impacts of our policies on energy
prices & bills November 2011, DECC, 2011
The scenario assumes DECC enacts its low carbon policies.
However, these figures aren't attributable to the impact of climate
and energy policies in isolation. The £178 figure includes a
variety of factors increasing energy bills, including the cost of
wholesale gas and upgrading the network grid. Climate and energy
policies don't account for the whole amount.
The Telegraph article: poorly headlined
The Telegraph article describes these figures carefully - saying
that bills will go up by 2030 "under all of the Government's green
and fuel poverty policies". The piece also flags DECC believes that
bills would go up by more - £245 - if those measures were not
introduced.
But given the headline of the piece, it's easy to misread the text
and conclude that a predicted price rise "under" all of the
government's energy and climate change policies will occur directly
as a result of them. In an article published as the energy bill is
announced, it might also be easy to assume that the figures refer
to the cost impact of the new legislation - even though this
would be a mistake, as the main article text does not make this
link.
The article's headline and sub-heading could also mean that
readers are more likely to misread the article than not - despite
the caveats in the text, the headline and sub-heading give a
different message. The headline is:
"Wind farms to increase energy bills by
£178 a year"
And the sub-heading adds:
"Energy bills are poised to rise by up
to £178 a year under a deal struck between [Chancellor] George
Osborne and the Liberal Democrats to pay for a series of wind farms
and nuclear power stations."
This gives the impression that the figure is a result of wind
farm subsidies - which is not accurate - and that it has emerged
from negotiations on the energy bill. This is not right either -
the DECC scenario the figure is taken from is a year old and was
created long before the current energy bill wrangling.
A new number for the energy debate
The estimate that household energy bills could rise by "about
£170" has appeared in other newspapers over the last few days -
including the
Daily Mail, the
Independent and the
Sunday Times. It seems likely that these are sourced from the
Telegraph article.
The Independent is the only outlet to lay the blame on wind
farms. All the other newspapers, implicitly or explicitly, lay the
blame at the door of the energy bill. This week, for example, the
Sunday Times uses the figure of £170 in a briefing about the
energy bill. It says:
"The measures are expected to lead to a
rise of £110 in the annual energy bill of the average household,
though some estimates say it could be as much as £170."
And in another article, the Telegraph
writes:
"[I]t emerged that energy bills are
poised to rise by up to £178 per year to pay for a series of wind
farms and nuclear power stations."
Confusion over what the figures in this article refer to appears
to have launched a new, misleading number into the energy debate,
as other newspapers pick up on the Telegraph's carefully described
estimate - and somewhat less careful headline - and link it to the
energy bill.