Why has the Government still not formally responded to the independent review that it commissioned into the cost of energy? Perhaps its findings are too damning. Staggeringly, the review found that the government has wasted the best part of £100billion on the decarbonisation of the power sector.
That this is not more widely known is thanks to the cosy consensus that exists in the British media around the need for renewables, which means that their effectiveness, or value for money, is ignored. The real victims of this wastefulness are those struggling in energy poverty, who have paid far too much for their electricity as a result.
Their money went straight on to the profit margins of renewable energy companies who had claimed that only vast subsidies would make them viable. Now they say that those subsidies actually resulted in falling prices. What the review reveals is that they took the civil servants and politicians for a ride, ordinary people paid the price, and they will continue to do so if nothing is done.
It should be obvious to anyone with a basic grasp of economics that if you let civil servants set the subsidies for renewable energy generation, they will end up much higher than if you invite competitive bids through auctions.
Since auctions have been introduced there have been significant reductions in prices, but this is sadly too little, too late, because high prices have been guaranteed far into the future. Ninety per cent of the bill for renewables up to 2030 has already been determined. This is an important fact to remember when you next hear someone banging on about how fast the cost of renewables is falling.
Professor Dieter Helm, who was commissioned to produce the Cost of Energy Review, is one of Britain’s most respected energy economists and supports the Government’s objective substantially to reduce its emissions. By no means a climate sceptic, then. His report takes it as given that the Climate Change Act must be met. Even more could be saved if this damaging and ineffective piece of legislation were removed, but this isn’t even considered.
Nonetheless, he has many sensible recommendations for the Government. […]