Environmental Levies To Cost £108 Billion By 2029/30

By Paul Homewood

The OBR is very explicit about the new budget!!

Spending up by £70 billion (so much for “black holes”!), tax up by £36 billion and borrowing by £32 billion.

But the bit we are concerned with is their updated projections for Environmental Levies, aka subsidies for renewable energy.

This is their new version:

https://obr.uk/efo/economic-and-fiscal-outlook-october-2024/

However, they have not counted Feed in Tariffs again, which are subsidies for renewable energy and do add to our energy bills. They used to count these every year, but for no good reason were excluded a few years ago. They also included Warm Home Discount, which is assistance for low income groups, and therefore should not be included.

Finally they show the Climate Change Levy elsewhere. As this is also added to energy bills for non-domestic users, these should be counted as Environmental Levies too.

Making all of these changes, we get the following:

It is noticeable that Levy costs sharply rise, in comparison to the March 2024 budget, from 2026/27. This is mainly due to higher CfD subsidies, thanks to Mad Miliband’s latest auction round. Also Capacity Market payments are projected to rise, as reliance on intermittent renewables increases and Labour’s 2030 deadline nears.

It is also worth bearing in mind that levies in 2026/27 will be £5.2 billion more than last year. Labour’s promise to cut energy bills was always a lie; now the OBR have confirmed that, far from cutting bills, Labour’s Net Zero policies will increase them substantially.

And between this year and 2029/30, total levies will amount to £108.4 billion.

Let that number sink in! It’s equivalent to over £4000 for every household in the country.

3.8 Environmental levies
	£ billion
	Outturn	Forecast
	2023-24	2024-25	2025-26	2026-27	2027-28	2028-29	2029-30
Renewables obligation	7.6	7.8	8.2	8.5	6.8	6.9	6.9
Contracts for difference	1.8	2.3	2.2	2.8	2.7	2.6	3.1
Capacity market1	0.0	1.3	1.8	3.2	4.0	4.0	4.1
Green gas levy1	0.0	0.0	0.1	0.1	0.2	0.2	0.2
Feed in Tariffs	1.7	1.7	1.7	1.7	1.7	1.7	1.7
Environmental levies	11.2	13.1	14.0	16.3	15.4	15.4	15.9
Memo: Expenditure on renewable heat incentive (RHI)	1.2	1.2	1.2	1.3	1.3	1.3	1.3
Memo: Climate Change Levy	1.9	1.9	1.9	1.8	1.8	1.7	1.8
TOTAL	14.2	16.2	17.1	19.4	18.4	18.4	18.9
At March 2024		16.3	16.9	18.6	16.3	15.6