The Department of Energy and Climate Change’s (DECC) annual energy
statement sheds light on a myth repeated by those who oppose the
development of low-carbon energy: that government support for wind
turbines, hydro-stations, solar panels, heat pumps and biomass boilers is
to blame for recent increases in energy bills.
In fact, the DECC finds that, between 2010 and 2013, when the average
household energy bill increased from just over £1,000 to nearly £1,300, the
cost of supporting home-grown, low-carbon sources of energy accounted for
only around five per cent of that increase. Meanwhile, wholesale energy
costs (largely the rising cost of imported gas) are estimated to have
contributed between around 56 per cent and 71 per cent to our bills.
Renewables, which generate almost half of Scotland’s electricity close to
home and insulate us from fluctuating global energy markets, are part of
the solution, not part of the problem, as a vocal minority of anti-green
energy campaigners would have us believe.
A five per cent increase over three years, though, may still be too much
for some. With the evidence on climate change stacking up, and ambitious
carbon reduction targets recently approved by the European Commission,
albeit on a voluntary basis, it’s only natural to wonder if the switch to
renewables will keep costing consumers. In fact, the impact of all the
Government’s energy and climate-change policies mean that household bills
will, by 2020, be around £92 lower a year than if we had continued to rely
on increasingly scarce fossil fuel reserves and not begun to cut costs for
renewables. This doesn’t begin to account for the contribution renewables
make to tackling climate change.
Renewables give us certainty over the energy we use. Homegrown green energy
insulates us against fluctuating global energy markets while helping cut
our carbon emissions, lower energy bills and create local jobs and investment.
Yet a number of barriers stand in the way of maximising our renewable
energy potential. Our electricity grid is crying out for modernisation and
large amounts of money must be invested in the infrastructure which brings
power into our living rooms. Two suggestions outlined in Scottish
Renewable’s manifesto for the 2015 General Election could help alleviate
this challenge and allow the public to generate income from the growth of
the UK’s renewable energy sector and reduce, or remove, that necessary
investment in energy infrastructure from household bills.
First, we advocate that the next government of the UK creates a “green
bond”, an investment vehicle that would make it easy for people to invest
in the growth of renewable energy and capitalise on the long-term returns
offered by renewable energy projects. The bond would also reduce the levels
of cash that the country would have to seek from overseas funds to invest
in our infrastructure, as well as extend engagement with this new industry
as government seeks to increase levels of community ownership and
investment. Secondly, we call for further debate on the merits of moving
subsidies for renewables and nuclear energy away from consumers’ bills and
into general public spending, a move that could cut the 70p-a-week
contribution to renewable energy through household bills to zero.
Under our plans, that support could be funded at least in part from
existing levies on carbon emissions. In 2014-15 the Climate Change Levy and
the Carbon Price Floor are estimated to raise enough money to cover the
entire budget for renewables support in Britain. So, while Scotland and the
UK pursue ambitious climate-change targets, two factors must be taken into
account: support for renewables has contributed only marginally to
increases in household energy bills, and some smart thinking around funding
could reduce that to zero to allow bill payers to make money as our energy
future becomes cleaner, cheaper and more secure.
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