London, 6 August – The Global Warming Policy Forum has warned Boris Johnson that the astronomical costs of his Net Zero agenda are the main driver of Britain’s energy cost crisis and has called for a pause and reconsideration of costly Net Zero plans.
While the energy regulator, ministers and green activists are blaming natural gas prices for the latest round of utility price increases, this is largely a red herring.
That policy-driven costs are more important than market prices is evident when US and European energy prices are compared. In fact, natural gas prices in Europe are more than three times as high ($13/MMBtu) as they are in the US ($4/MMBtu) where fracking is allowed and shale gas is cheap and abundant.
Boris Johnson’s effective ban on extracting the UK’s enormous shale gas resources and the £12 billion a year in subsidies for renewable energy investors that consumers have to pay via their energy bills continue to drive up energy bills.
Add to that that UK utilities have to pay record-high prices to buy carbon permits for generating power from natural gas and the result is relentless rises in electricity and heating prices.
Energy supplier Haven Power estimates that 37.6% of their average consumer bill is due to policy costs, made up of subsidies to renewables (Renewables Obligation, Contracts for Difference, Feed in Tariff), the Capacity Mechanism required to stabilise the system due to unreliable wind and solar, and the Climate Change Levy, a carbon tax levied on industrial and commercial consumption.
For comparison, the wholesale energy cost makes up only 41.7% of the bill (see chart below).
It is clear, therefore, that climate policy costs currently make up as large a share, about 40%, of their customer bills as wholesale energy costs.
Boris Johnson is now facing a growing public backlash as the combined effect of his Net Zero plans and disastrous green energy policies will hit millions of low-income and ordinary households.
Craig Mackinlay MP said:
I would recommend the government pause for breath before running further and faster to a net-zero electoral disaster based upon uncosted fairytales. It’s becoming ever more apparent that the real cost to the ‘just about managing’ will be huge.”
Steve Baker MP said:
The awful cost of Net Zero is becoming ever clearer. Boris must level with us that he intends us to be poorer and colder in the years ahead. With my constituency coming out worst for food insecurity, the last thing we need in Wycombe is higher bills for hard pressed families as we recover from the coronavirus.
This will only get worse as Boris presses on. The PM should now pause all Net Zero plans until COP26 so that we know whether the rest of the world will sign up to similar Net Zero targets.”