Cost of renewable energy to UK customers to treble


With UK chancellor George Osborne having fired the starting gun on the Conservative Party‘s election campaign with yesterday’s (Thursday) budget speech, right-leaning newspaper The Telegraph has predicted the costs of the nation’s clean energy policies to consumers will treble by 2020.

Quoting figures released by the Office for Budget Responsibility (OBR) – established as an independent body by the Conservative-led coalition government to provide analysis of public finances – The Telegraph yesterday reported the cost of green subsidies on customer bills would rise from an average GBP68 per year ($100/year) in 2014 to GBP226 per year ($333) in 2020 and accounting for 15 per cent of the total bill by the end of the decade.

Wind in the firing line

The OBR figures are chiefly critical of subsidies for the wind industry, a bugbear of the Tory party, with the Telegraph report stating onshore wind farms receive a subsidy of GBP85-90/kWh ($125-132/kWh) generated, some GBP40 ($59) above the market rate of power generated from fossil fuels.

The report adds wind power subsidies accounted for GBP2.5 billion ($3.69 billion) of the GBP3.1 billion ($4.6 billion) cost of clean power subsidies last year, a total which will rise to GBP9.4 billion ($13.9 billion) per year in the next five years, according to the OBR, which predicts the cumulative cost of driving clean energy uptake in the UK will be GBP89 billion ($131.4 billion).

Government ministers have disputed the findings, according to the Telegraph report, claiming the annual cost to the average household will be GBP141 ($208) by the end of 2020, rather than the GBP226 ($333) OBR figure.

Secretary of state for energy and climate change Ed Davey has pronounced himself supportive of onshore wind farms as the Tories’ coalition minority partners, the Liberal Democrats, pursue a policy of distancing themselves from the Conservatives ahead of the election on May 7.

The OBR report cited by the Telegraph estimates ditching environmental subsidies – the ‘green crap‘ referred to by prime minister David Cameron, who campaigned ahead of the last election by promising to introduce the greenest Conservative Party ever – in favor of gas-fired power stations could save the average household GBP214 ($316) per year by 2020.