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Tuesday, 21 January 2014

Green Taxes Cause Energy Prices Hikes

Romney Marsh Wind Farm, on the Kent/East Sussex border, in England - from the website Britain Gallery

No politician or mainstream media outlet is saying why shale gas from fracking may not reduce, as it should, consumers' utility bills.

The reason why energy bills in Britain are so high and will continue to soar is largely the ever-increasing cost of that “green energy” imposed to us by the Climate Change Act of 2008, pushed through Parliament by Ed Miliband, then Secretary of State for Energy and Climate Change, who recently proposed to halt price hikes made inevitable by his own policies.

Week after week we saw on the panel of Question Time, on BBC1, one or another Labour politician accusing the UK's "big six" (or seven) energy companies of increasing their bills and blaming the coalition government for letting them get away with it.

Nobody can say that the Labour Party is incapable of the most incredible hypocrisy. This is why UK electricity prices are so high:
Tony Blair's Labour government introduced in 2002 the Renewable Obligations Order. This system obliges companies supplying electricity to purchase an annually increasing proportion of their electricity from so-called green or renewable (non-fossil) sources. This means they have to pay inflated prices, which they pass on to their customers through their electricity bills.

Blair announced in May 2002 plans to meet Britain's Kyoto and EU targets, and in March 2003 the government published an Energy White Paper on the UK's future energy strategy. In its Section 4.7 it says explicitly:
We have introduced a Renewables Obligation for England and Wales in April 2002. This will incentivise generators to supply progressively higher levels of renewable energy over time. The cost is met through higher prices to consumers. By 2010, it is estimated that this support and Climate Change Levy (CCL) exemption will be worth around £1 billion a year to the UK renewables industry. [Emphases added]
The same White Paper estimated that meeting the carbon reduction targets would increase household energy bills by up to 15%.

The reason for this is that the renewables are very expensive, and in particular the offshore wind farms on which both the previous and this government are so keen are the most costly of all fuel sources.
As investigative journalist Christopher Booker righty says:
Politicians are complaining about rises in fuel bills that are largely the result of their own actions.
If you exaggeratedly tax companies in the pursuit of a "green energy" policy that follows the diktats of a discredited, if not outright refuted, theory like AGW (anthropogenic global warming), the inevitable result is higher prices for households and, in extreme cases, fuel poverty.

The coalition government is not much better than its socialist predecessor.

A few months ago SSE, one of the UK's six biggest energy companies, increased its prices by a further 8 per cent, and tried to explain that what made that price hike inevitable was the 13 per cent rise in the company's costs, two-thirds of which were due to “green” taxes and the soaring cost of connecting new wind farms to the grid.
While SSE called for a curb on these green levies – such as the crazy “carbon tax”, designed eventually to double the cost of electricity from fossil fuels, which still supply 70 per cent of our needs – the only official response was a fatuous call from our energy minister, Michael Fallon, for consumers to boycott SSE. Mr Fallon was oblivious to the fact that his Government’s policies will soon force all other energy companies to follow suit.
In the meantime, a new brand of criminals have emerged: the "energy thieves", utility clients who tamper with meters to steal their gas and electricity and in the process put the lives of neighbours at risk. Refusing to pay also means that their costs are passed on to honest customers.

This is exactly the scenario described by Milton Friedman as incentives for immoral behaviour brought about by bad laws, of which our Climate Change Act is a perfect example.

Photo of the Romney Marsh Wind Farm, on the Kent/East Sussex border, in England, courtesy of the website Britain Gallery

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