Obligations half of energy bills?

grahamc2003

We all know our energy bills consist of costs towards renewable obligations for things like supporting 'green' technologies (feed in tariff, subsidies for windfarms, home insulation initiatives etc etc) and the level of those costs has always been a mystery to me.

Today on Radio 4, Angela Knight (ceo of Energy Uk) implied that these obligations were now 50% of our energy bills. I'd expect our electricity bills are loaded highly to cover those costs but I always thought gas bills had lesser renewable costs loaded onto them, so I find what she said surprising.

When the Today program is available later on the net I'll listen very carefully to exactly what she said, but in the meantime, did anyone else hear her say obligations were now 50% of energy bills, and does anyone else find that surprising?

dogshome

Never trust the statistics spouted by the paid mouthpiece of any industry - Starbucks originally claimed they were paying all their taxes, but as the situation rolled on and they had to clarify the statement, the taxes they were refering to were only VAT and the Employees NI contributions

So Angela Knight says 50% of our bill is due to 'Green policies' - No doubt she has an explanation as to why on a September '12 Elec bill from Brit gas, they state in Black & White that 19% is due to Green Taxes, and that also includes the cost of Social tariffs

Perhaps she is right, so when the present industry Green Tax to pay for 'Free' Loft and Cavity Wall insulation comes to an end this year, we will all see a big drop in our bills

grahamc2003

Things are becoming a bit clearer - I think her 'obligations' included distribution costs, so the cost of the gas and electricity grid. But the electricity grid upgrades required are often due to linking in things like offshore windfarms, so the whether the distribution cost increases are actually themselves 'green' costs is debatable.

WestonDave

She did say 50% at which point I nearly crashed the car! Its obviously in her interests to make out that half the cost of energy is "obligations", most of the rest of it global energy prices so don't blame our members for the tiny bit of profit they make.

The reality is that there are high costs to upgrade the grid because as an industry they've done nine tenths of naff all for the last 20 years so its now knackered. Their admin costs are still largely driven by their pre-privatisation structures and these also contribute a fair bit to bills.

Of course energy costs are globally determined and are expensive now compared to before China etc started using huge quantities, and we know there are green infrastructure costs which should in time reduce as we get housing stock up to decent insulation standards. However it doesn't absolve energy companies of obfuscation in order to appear to be offering good deals on their best tariffs whilst leaving huge numbers of people on heritage tariffs that cost a lot more.

Wywth

dogshome wrote: »

Never trust the statistics spouted by the paid mouthpiece of any industry - Starbucks originally claimed they were paying all their taxes, but as the situation rolled on and they had to clarify the statement, the taxes they were refering to were only VAT and the Employees NI contributions...

I'm sure there is no question that Starbucks pay all the taxes they are legally required to pay in this country.
If they do not, HMRC would be all over them.

Now whether what they legally are required to pay is the same as what someone may consider they should morally pay is a different question.

Wywth

undaunted

Lies, damned lies & statistics as they say!

I sometimes wonder how much / many customers actually care about carbon footprints, green issues etc versus the cost of energy?

After all bearing in mind David Camerons recent comment isn't the economics of an issue more important than the social / green issues - or is that only so when convenient to his agenda?

grahamc2003

WestonDave wrote: »

The reality is that there are high costs to upgrade the grid because as an industry they've done nine tenths of naff all for the last 20 years so its now knackered. Their admin costs are still largely driven by their pre-privatisation structures and these also contribute a fair bit to bills.

.

What should the grid have done which it hasn't? I'm just pleased they've managed to keep the lights on with everything the regulator has thrown at them. Most things they do directly on the grid network (and they do much more than that) costs enormous amounts of cash, and the regulator determines exactly which projects go ahead. There's the HVDC bootstraps project to bring more Scottish and interconnected power to England, which I expect will eat lots of cash for donkey's years.

Which parts of the grid are knackered?

The demands on the grid for things like offshore windfarms are where more billions are to be spent - it doesn't really make engineering sense to have large capacity well outside the footprint of a grid - not only has the grid extension to be designed for the maximum capacity, but once brought ashore, the surrounding grid for many miles has to be upgraded as that power is dispersed within the existing grid.

This is partly why I have trouble believing the simplistic charts posted of the various elements of power costs. Having say 24% as transmission and distribution charges hides the percentage of that 24% which is due to 'green' costs (i.e. connecting offshore windfarms to the grid) - likewise the 54% wholesale energy charge, which itself is higher than it would otherwise be were no intermittent green generation connected.

I'd like to see a proper analysis of the various elements - maybe that's what Angela Knight has commissioned, and come up with 50%. Would be nice to see the report if such a report exists.

Cardew

As well as 'social tariffs' there is the cost of administering the pre-pay meter scheme.

The Bosses of the Big 6 gave evidence to the Parliamentary Committee that the scheme was operated at a loss, and that was when pre-pay tariffs were way higher than other tariffs.

Having reduced those tariffs under considerable political pressure, it will be interesting to see the present position.

I would also like to see just how much the industry pays the parasite comparison networks, and the true cost of 'musical [STRIKE]chairs[/STRIKE] Tariffs' we are all encouraged to play.

equitable

The closest you will ever get to the real truth will be in the DECC tables, you'll need a large beer, and even larger teeth to chew through them.

Here's the stakeholders package of proposed measures including insulation and the proposed 4-core tariff comparison