No Escape: How Households Suffer Astronomical Cost of Great Wind & Solar Scam

Working out what households pay for subsidies to wind and solar is a task, in itself. Naturally, the crony capitalists that profit from the greatest economic and environmental fraud of all time, are keen to conceal the extent of the state-sponsored larceny from their unwitting victims.

To the same end, their political enablers often talk about the cost of wind and solar subsidies – and other hidden green levies – per household, in terms of the cost of a cup of coffee or scoop of ice cream.

Which might make sense, if the metaphorical cup was the size of an Olympic sports stadium and the scoop of vanilla swirl was big enough to fill it.

Dr John Constable has been on a quest to reveal the true cost born by British households for their government’s renewable energy obsession, for years.

Here he is again, with a tally of what can only be reckoned as an astronomical burden for British families.

The Cost of Green Levies
Net Zero Watch
John Costable
February 2022

Environmental levies (green levies) now cost the UK economy about £11 billion a year in total, putting £150 a year on the average household electricity bill, and a further £250 per household on the annual cost of living, a total of £400 per household per year. The levies also depress wages and rates of employment.

The Office for Budget Responsibility (OBR) publishes estimates of the environmental levies on the British economy as part of its Economic and Fiscal Outlook, which is released twice a year. The most recent issue is dated October 2021, with the costs reported in Tab 2.7 of the spreadsheet ‘Supplementary fiscal tables: receipts and other‘:

Figure 1: Tab 2.7 of OBR spreadsheet ‘Supplementary fiscal tables: receipts and other‘, in the Economic and Fiscal Outlook – October 2021 (1).

The levies listed here consist of subsidies to renewables and payments to other generators to support renewables, and amount to £9.5 billion in the current year, rising to £12.4 billion in 2026/27.

The OBR has decided to exclude the costs of the Feed-in Tariff (FiT) for small-scale renewable generation, which Ofgem reports as costing consumers about £1.76 billion per year. (2) This is probably because of technical difficulties in determining how much of that sum should be considered as a subsidy. In our view, it is all subsidy, giving a total green levy cost of about £11.26 billion per year, nearly all of it on electricity bills.

For the purposes of this note, we will round this down to £11 billion per year.

Households meet all of these costs:

  • through their own energy bills
  • through the cost of goods and services as industrial, commercial, and public sector consumers pass on their share of the levies through prices or taxation.

The Office for National Statistics reports that there are 27.8m households in the UK (3) so the total cost of living impact of the £11 billion a year levies on British households can be calculated as approximately £400 a year.

Of this total, about £150 per year is recovered directly from domestic electricity bills, a figure calculated thus. Households account for some 42% of electricity sales (108 TWh out of 259.5 TWh in total) (4) and therefore pay a similar proportion of the total levy cost in their energy bills, or £4.4 billion a year. This, divided by 27.8m households gives a mean electricity bill impact of about £150 per year.

It is also important to remember that the green levies charged to industrial and commercial consumers will exert a downward pressure on wages and rates of employment, a negative but real effect of unknown magnitude.

There is a strong argument, in our view, for removing these levies from the national electricity bill to reduce the overall cost of living for UK households and cost of operation for businesses increasing wages and employment. In the short term, the cost might be transferred to general taxation, but
without delay these subsidy entitlements should be bought back by government at a discount and cancelled.

Notes
1. https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/
2. https://www.ofgem.gov.uk/publications/feed-tariff-fit-annual-report-2020-21
3. https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/families/datasets/familiesandhouseholdsfamiliesandhouseholds
4. https://www.gov.uk/government/statistical-data-sets/regional-and-local-authority-electricity-consumption-statistics
Net Zero Watch – Factsheet

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May 4, 2022 at 02:30AM

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