Electricity Prices Rocketing, Just As Successive Governments Planned

By Paul Homewood

 

 

There have been a lot of crocodile tears lately amongst our political establishment concerning recent energy price rises.

But they cover up the fact that this is exactly what successive governments have been planning for years.

It all started back in Tony Blair’s day, of course, when his government signed up to the EU’s Emissions Trading System, (ETS).

The Climate Change Act soon followed, along with the first subsidies for renewable energy, which now cost over £400 for every household in the country.

As a cap-and-trade system, the ETS sets an emissions cap or limit on the total emissions allowed by all ETS operators, but within that limit the carbon market allows participants in the System to buy and sell allowances as they require. Over the years, the allowances issued have been cut back, thus forcing up the market price.

The ETS covers not only the power sector, but also large industrial energy users.

The Coalition government in its wisdom decided in 2013 to add an extra £18/tonne to that market price, known as the Carbon Price Support, AKA Britain’s Hair Shirt.

 

The objective of this carbon pricing was clear from the start – to force fossil fuels out of the energy mix and to replace them with much more expensive renewable energy.

And it was to be energy consumers who would pay this price.

For a while though, EU carbon prices remained far too low to have much effect.

That is why the Committee on Climate Change planned for a large rise in carbon prices in its Fifth Carbon Budget, published in 2015. They decided what we really needed was a “Target-consistent carbon value”, rather than a market-based one:

image

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https://www.theccc.org.uk/publication/the-fifth-carbon-budget-the-next-step-towards-a-low-carbon-economy/

By 2030, they wanted the carbon price to rise from around £10/tonne CO2 to £78/tonne, with much larger rises to follow. According to the CCC, the carbon price would force the cost of CCGT gas generation up from £52 to £111/MWh.

And in 2018, BEIS followed the CCC’s lead, and set a similar set of targets, rising from £12.76 to £80.83/tonne CO2 by 2030:

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https://www.gov.uk/government/publications/updated-short-term-traded-carbon-values-used-for-uk-policy-appraisal-2018

 

Currently UK carbon prices stand around £50/tonne, roughly where the government had expected them to be by 2026.

And if they get they and the EU get their way, there will be a lot more pain to come.

via NOT A LOT OF PEOPLE KNOW THAT

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September 23, 2021 at 04:06AM

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