How tax collection becomes a profit centre for energy companies

Npower have been widely criticised for handing out three million low energy bulbs to customers, who never asked for them. Ofgem has “expressed concern” and the Green Party have described this as “inexcusable”. This is one of those stories that are a little complex to understand, but when you do understand it you will appreciate that there is something that stinks in the United Kingdom’s energy policy, which upon close, careful and cool examination, appears to have been devised by morons. Continue reading

Insulating the nation – who will pay for it?

The Government is intent on insulating the nation. They have announced what they describe as a £1 billion package which will help people save money on their fuel bills by loft and cavity wall insulation. That will take the United Kingdom’s spend on insulation to outweigh all other home improvement spends by a huge margin.

Up until now, the existing insulation schemes were paid for by the energy consumers who have a percentage added to their fuels bills.  Continue reading

Gas and electricity prices rise – what this means and what will happen next

If you buy your gas and electricity from Npower you will find yourself paying a lot more for your energy. They are raising gas prices by up to 27% and electricity prices by up to 20%. Average price increase will be around 17% for gas and 15% for electricity. However, you should not be in a rush to change energy supplier to one of the other providers because they will, I am sure, follow suit over the next few weeks.

An average home will find itself paying over £154 a year more this year for its energy, than it did last year.These high increases spell hardship, discomfort and sometimes death for the fuel poor. If you already spend more than 10% of your income on fuel (and thus you are officially categorised as being in fuel poverty) you will find it hard to make ends meet and stay warm; your best chance to survive will be for a warm winter.

Some newspapers have accused the energy companies of profiteering. I am no fan of the fossil fuel energy producers but I am sure that they have little scope for profiteering. Energy prices have been going upwards, on a trend basis, for the past five years and although they sharply fell last year upward pressure this year has been very significant and it is only a matter of time and marketing before all these price increases are passed on to the consumer.

What is new about the present price increases is that there are large regional variations, so that the further away from the source of energy you live the more you will pay. Prices are now being adjusted to take delivery into account. That might not be too fair.

Those people who have invested in some form of microgeneration will reap some dividends on their investment, because they will be immune form energy price increases, to the extent that their microgeneration provides them with free energy. Solar thermal users will benefit the most, as gas (mostly used by households for heat) will generally rise more than electricity.

If you live in fuel poverty and spend more than 10% of your income on energy you may be delighted to know that the government passed a law in 2000 under which they were obliged to abolish fuel poverty by 2015, which is only seven years away. Well, I admit that you might not be really delighted with this news because figures of those in fuel poverty will continue to rise with prices unless measures are put in place to enable the poor to have fuel. Fuel poverty reached an all time low of just over two million households in 2003, but virtually doubled to four million households in 2006.

Charities like National Energy Action, Energy Action Scotland and Age Concern all deplore the fuel rise, but they will be powerless to prevent this and the further fuel rises in the offing. They can only alleviate the effects of the fuel rise by measures. As I see it the measures will have to be increased tremendously, because I fear the present fuel rises will be seen to be simply the tip of the iceberg as a more industrialised and more prosperous developing world competes with the developed world for limited supplies of fossil fuel.

This Government has a naive and childlike belief in legislation. The law passed to abolish fuel poverty will do no such thing; it might help from time to time and in specific cases but all that is rather scratching the surface of the problem, because fuel poverty rises and declines according to fuel prices unless comprehensive measures are put in place.

The same childlike belief in the efficacy of a legally binding statement that the country is obliged to abolish or change something by a future date is exhibited in Mr Hilary Benn’s much criticised Climate Change Bill, which suffers from the defect of enacting a pious hope or a statutory target to reduce carbon emissions without the measures needed to see it through. I fear that as a result our carbon and other greenhouse gas emissions will suffer the same fate as the number of households in fuel poverty – they will inexorably increase.