Cost of electricity set to soar
The UK is the only country in the world that has legally binding targets to cut carbon emissions. By 2020, 30% of all our electricity will have to come from renewable sources. It is a well known fact that generating electricity using, for example, wind power, is much more expensive than from a coal fired power station. So to plug this gap, and make it attractive to investors to put money into building wind farms and other renewable projects, the government makes subsidies available.
The current subsidies available to build wind farms and other renewable come to £1 billion, or £13 on our annual electricity bills. Subsidies for smaller wind turbines and solar panels comes to £610 million - or £8 annually on electricity bills. So at the moment each year we already pay £21 to subsidise these projects in the form of a 'hidden' charge on our bills.
The proposed subsidies, or green taxes, by 2020, are much higher.
£1.8 billion for ground source heat pumps - £23 on our annual bills.
£1 billion towards carbon capture coal power stations (Like Richard Budge's Hatfield project in South Yorkshire) - £15 on consumer bills.
£2.6 billion to artificially increase the price of carbon - £40 on bills. This is a measure designed to make generating nuclear power more attractive, by raising the price of carbon allowances under the European emission trading scheme. This makes generating zero carbon nuclear power more attractive relative to high carbon gas or coal power plants.
So in total, proposed green taxes will equal £78 on our annual fuel bills. Added to the existing subsidy we are already paying, a total charge of around £100 will be applied to our fuel bills annually in order to meet our legally binding targets on renewable energy by 2020.
This takes no account of a new subsidy regime which the government have been considering to support burning more biomass at power stations such as Drax.
And let's not forget that the government are standing firm in their belief that any new nuclear power stations should not require any taxpayer subsidy - other than a subsidy to artificially increase the cost of carbon, as explained above. Some utility companies believe that this is simply not incentive enough to kick-start the building of new nuclear power stations.
Next week's spending review could mean there are changes to the level of some of these subsidies. But one thing is for certain. The cost of electricity looks set to surge in the next few years in order to de-carbonise our economy.
Hello, I’m Paul Hudson, weather presenter and climate correspondent for Ö÷²¥´óÐã Look North in Yorkshire and Lincolnshire. I've been interested in the weather and climate for as long as I can remember, and worked as a forecaster with the Met Office for more than ten years locally and at the international unit before joining the Ö÷²¥´óÐã in October 2007. Here I divide my time between forecasting and reporting on stories about climate change and its implications for people's everyday lives.
Comments
or to comment.