Ofgem condemned for misleading the public about energy price rises

London, 5 February: The Global Warming Policy Forum (GWPF) has condemned Jonathan Brearley, the chief executive of energy regulator Ofgem, for misleading the public about additional rises in energy prices.

Ofgem has claimed the 9% rise in energy bills for millions of British households is primarily a reflection of the rise in wholesale costs, and suggested that consumers should “shop around” for a cheaper supplier. 

In reality, wholesale costs account for only about 33% of electricity bills, with two-thirds of the very high costs of UK electricity due to subsidies for renewables investors and other socialised costs. Cost increases are mostly due to these parts of the bill;  

1. The cost of renewable energy levies are expected by the OBR to rise from £9.6 billion in 20/21 to to £10.2 billion in 2022/23, not including the FiT costs. Together they account for about 40% of the bill.

2. Transmission and Distribution charges (and losses) are also heavily affected by climate policy and account for about 20% of the bill. 

3. ‘System balancing’ costs alone were £2 billion last year, up from £1.5 billion in the previous year, with much of that increase due to the presence of inflexible and uncontrollable renewables. The bulk of that additional £500 million has been deferred to this coming year, and accounting for a substantial part of the increase that Mr Brearley is blaming on “wholesale” costs. 

Mr Brearley’s suggestion that customers “switch” to get a cheaper tariff is therefore nonsensical. Climate policy and system costs account for the majority of the bill, and these apply equally to all suppliers, meaning that there can be little to choose between them, and switching can have no significant effect.

To blame “the market” for what is effectively a manifest failure of ever more expensive Net Zero policies is an attempt to deflect attention from the true culprits behind rising energy poverty. If Mr Brearley and Ofgem really wanted to do something for hard-pressed consumers they would tackle the ballooning effect of climate policies.” GWPF director Benny Peiser said.

“Boris Johnson and his government are risking their political survival if they continue to push up the cost of energy, driving millions of British households into energy poverty,” Peiser warned.

The post Ofgem condemned for misleading the public about energy price rises appeared first on The Global Warming Policy Forum (GWPF).

via The Global Warming Policy Forum (GWPF)

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February 5, 2021 at 09:08AM

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