By Paul Homewood
| 2.8 Environmental levies | ||||||
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Forecast | |||||
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2023-24 | 2024-25 | 2025-26 | 2026-27 | 2027-28 | 2028-29 |
| Renewables obligation | 7.0 | 7.9 | 8.4 | 8.6 | 6.8 | 6.9 |
| Contracts for difference | 1.5 | 0.9 | 1.0 | 1.2 | 0.7 | 0.6 |
| Capacity market1 | 1.1 | 1.4 | 1.9 | 3.2 | 3.4 | 3.1 |
| Green gas levy | 0.0 | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 |
| Environmental levies | 9.6 | 10.4 | 11.4 | 13.1 | 11.1 | 10.7 |
| Memo: Renewable Heat Incentive | 1.2 | 1.2 | 1.3 | 1.3 | 1.3 | 1.3 |
| Memo:Feed in Tariffs | 1.7 | 1.7 | 1.7 | 1.7 | 1.7 | 1.7 |
| Memo:Climate Change Levy | 1.9 | 1.9 | 2.0 | 2.0 | 1.8 | 1.9 |
| TOTAL | 14.4 | 15.2 | 16.4 | 18.1 | 15.8 | 15.6 |
https://obr.uk/efo/economic-and-fiscal-outlook-november-2023/
The OBR have published the latest Economic & Fiscal Outlook, following the Chancellor’s Autumn Statement, including the above section on Environmental Levies.
These show the costs added to energy bills as a direct consequence of government policy – in this case, the cost of the various assortment of renewable subsidies, capacity market payments and climate change levy.
The OBR also add the cost of the Renewable Heat Incentive scheme, though this is funded out of general taxation. As noted in previous years, the OBR decided to exclude FITs from the table a couple of years ago; I have reincluded them, as they were wrongly excluded and do increase energy bills. Also the Climate Change Levy originates in another table- I have taken the liberty of adding it to Table 2.8.
In short, the cost during this financial year is expected to be £14.4bn, rising to £18.1bn in 2026/27, equivalent to £670 per household.
Not all of the extra costs incurred because of policy are included. For instance, there is no mention of the costs of grid upgrades, system balancing costs and constraint payments – all the direct result of increased renewable generation.
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November 24, 2023 at 05:30AM
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