Five years since the establishment of the levy control framework (LCF), the government’s main tool to manage spending on clean energy, the National Audit Office (NAO) has provided some useful insights into its performance to date. While media coverage jumped to highlight its most negative claim, that renewables will cost households £17 more than planned in 2020, it failed to report the rest of the story: that energy bills overall will actually be lower in 2020, by an average of £38.
Tag Archives: energy bills
Energy bills are back in the news, with the Office of Budget Responsibility calculating new figures for the cost of low carbon power, the Competition and Markets Authority investigating energy companies, and both IPPR and Policy Exchange releasing reports in the past few weeks. With so much to debate, and a lot of seemingly conflicting numbers to grasp, here are five things you should know:
1. The levy control framework (LCF) makes up three per cent of the average energy bill.
The claim that government controls a large proportion your energy bill rests mainly on the costs of electricity and gas networks, which make up around 22 per cent of bills. In contrast, efficiency policies, which reduce consumption, and therefore lower bills, make up around three per cent. Low carbon power, covered by the levy control framework, also makes up just under three per cent of the bill. So called ‘policy costs’ are, therefore, mostly due to networks, not low carbon power. Read more
This post by Green Alliance’s director Matthew Spencer first appeared on BusinessGreen.
The Prime Minister created a storm when he announced that energy companies would have to put consumers on the lowest energy tariffs, but he may have done us all a service if his intervention helps kill one of the most persistent myths of the UK energy debate: that getting consumers to switch tariffs would make energy bills more affordable. Read more
This post is by Dustin Benton, senior policy adviser at Green Alliance
The BBC’s Panorama programme on 7 November made a serious factual error in claiming that renewables are the cause of energy bill rises over the past few years. Two excellent rebuttals appeared almost instantly: one from WWF and one from The Guardian. The BBC should correct its error, but arguably the damage is done. This is because a potentially reasonable debate about future energy bills is being framed by a lie about the cause of past energy price rises.
“I’m sure I’ll take you with pleasure!” the Queen said. “Two pence a week, and jam every other day.”
Alice couldn’t help laughing, as she said, “I don’t want you to hire ME – and I don’t care for jam.”
“It’s very good jam,” said the Queen.
“Well, I don’t want any TO-DAY, at any rate.”
“You couldn’t have it if you DID want it,” the Queen said. “The rule is, jam to-morrow and jam yesterday – but never jam to-day.”
“It MUST come sometimes to “jam to-day,”” Alice objected.
“No, it can’t,” said the Queen. “It’s jam every OTHER day: to-day isn’t any OTHER day, you know.”
“I don’t understand you,” said Alice. “It’s dreadfully confusing!”
From the perspective of an ordinary consumer, the debate over future energy bills looks a lot like this exchange from Alice in Wonderland. Everyone is talking about how to bring prices down, but it’s all ‘jam tomorrow’ (or, in the case of the first dash for gas, which brought our bills down in the 90s, ‘jam yesterday’). Real energy prices have roughly doubled since 2004, with a 17% rise over the past 12 months alone – driven in large measure by the rising wholesale price of gas. Read more