Chris Heaton-Harris is Member of Parliament for Daventry. Follow Chris on Twitter.
The time was always going to come when the amazingly active "green" movement came up against hard economic fact – and that time has arrived. As much as it is spun, energy produced by onshore wind turbines is much more expensive than existing energy sources. It puts up electricity bills for business and families, thus slowing down economic growth and increasing the number of people who are falling onto fuel poverty.
Energy powers growth, it drives your broadband, manufacturing equipment relies upon it, it heats your home and it keeps food fresh. Make energy more expensive and you make life more expensive – and that is what both domestic and international policies have been doing for years now.
Spain is just one of the countries that has realised these simple economic facts and the green industry, that has happily gorged on taxpayers subsidies and higher prices to the consumers is not happy, as this article in Business Week shows.
Here in the UK the message seems to be slower in getting through. I doubt if you'll be able to find a politician of any political colour who is not banging on about the need for growth in our economy in the country, but ask them why we are choosing deliberately to raise energy prices and thus reduce the chances of growth and few will be able to answer.
The Department of Energy and Climate Change (DECC) is where the problem lies. Under the stewardship of Ed Miliband, it took its eye off the ball and went away from trying to encourage cheap energy for all and put nearly all of its eggs in the renewable basket – and mostly gambled on wind power. Few people worried at the time. The economy seemed to be growing and energy prices were not likely to be a big political issue. Since then a great deal has changed, but not the mindset in DECC.
Driving the most vulnerable deeper into Fuel Poverty is a terrible policy outcome
DECC would have us believe that far from pushing up energy costs, onshore wind and the like are driving bills down. In their estimate of the impact of energy and climate change policies on average household energy bills in the year 2020 (published on the DECC website last year) they estimated that these policies would save the average consumer £94 (or 7%).
A tiny bit of examination of this claim and you find that the overwhelming part of the savings comes from "product policy" – a net saving of £141. This is nothing to do with wind or any other renewable energy. It is the savings you and I will make on our electricity bills by replacing old products (fridges, freezers, TVs etc) for new more efficient ones. Obviously, if you are struggling financially, you will not be able to replace these appliances as often and thus this means that the poorest in society will have much higher bills.
Indeed looking closely at DECC’s own figures, these policies – if they all work as DECC expects – mean higher fuel prices for 65% of consumers by 2020. You are only in the 35% who have lower bills if you can afford to spend lots of money replacing your appliances.
Personally I find it astonishing that anyone calling themselves a “progressive” is attached to policies that drive bigger and bigger profits for the “big six” energy companies, whilst pushing the most vulnerable in society deeper into fuel poverty by adding so much to their annual electricity bills.
Time For Action
UK subsidies for onshore wind come from “ROCs” – renewable obligation certificates. The Government has already announced its intention to reduce the “ROC” for onshore wind by 10% and put this idea out for consultation. A 10% cut will save a little money for the taxpayers, but won’t help us in the drive for cheaper energy to drive growth in our economy and reduce the numbers entering into fuel poverty.
The Government needs to announce a drastic reduction in the “ROC” and any announcement should be retrospective. Indeed, the subsidy regime has been so generous that we are hitting our 2020 targets for onshore wind now in 2012, so nothing less than a drastic cut will do.
I’ve already been able to demonstrate in the House of Commons the level of Parliamentary concern there is about onshore wind and all the problems it causes. I know – and Ministers know – that the support for massively cutting wind subsidies has been growing over the last few months. It would be nice to think that no further Parliamentary action is required to demonstrate this.
The consultation on the level of subsidy for onshore wind closed just as the letter I coordinated with 105 other MPs went in asking for a much much larger cut than the 10%. We are all now waiting for the long delayed announcement of the result of that consultation.
Across the world more and more countries are understanding that there a simple choice between subsidising expensive renewable energy sources, like onshore wind or economic growth. They are all choosing growth. So should we.