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The Liberal Democrats have dismissed a Conservative threat to cut renewable energy subsidies in order to reduce consumer bills as a "total red herring" while energy companies have warned that a political row over green policies will itself lead to higher prices.
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Lib Dems dismiss Tory threat to cut renewable energy subsidies
The Liberal Democrats have dismissed a Conservative threat to cut renewable energy subsidies in order to reduce consumer bills as a "total red herring" while energy companies have warned that a political row over green policies will itself lead to higher prices. Following the headline-grabbing pledge by Ed Miliband that a Labour government would freeze energy prices for 20 months Tory ministers queued up to attack green subsidies at their conference in Manchester last week with some saying that the levies should be cut in order to reduce bills.
But a senior Lib Dem source told the Guardian such a cut was not legally possible because contracts with energy companies are already in place: "This side of the election, the deals are already done: you'd need to be knocking on the doors of windfarms and saying the deal you had is off.“ The Lib Dem source added that just 3% of current bills – £37 a year – was spent on supporting wind, solar and other green power. "Half of the bill is wholesale energy costs and they are only going in one direction – up – as they have in the last year or two. Any 3% cut could be wiped out in the next six months."
Senior industry figures warn that political bickering over support for green energy will only add to investor uncertainty and so push up bills for everyone. "If parties are not pulling in the same direction, investments become riskier, borrowing becomes more expensive and, ultimately, consumers pay more," said Alistair Phillips-Davies, chief executive of SSE, in a letter to party leaders. "Energy policy is too important to become paralysed by politics." He proposed shifting the £110 of green and social policy costs from customer bills into general taxation, "shifting the cost away from those [in fuel poverty] who can't afford to pay and on to those who can."
Energy bills have doubled in the past eight years, with more than two-thirds of the rise due to the rise in global gas prices. But a growing part of the bill is composed of levies imposed by the government to pay for clean energy subsidies and social programmes to increase the warmth and efficiency of the homes of poorer families and pensioners. Currently, 5% of bills – £58 a year – is spent on energy efficiency schemes which, with the 3% for renewables and 1% for Europe's carbon emissions trading scheme, brings the total green and social costs to 9% of a bill. By 2020,
government projections indicate that proportion will double to about 20% – £285 of the expected 2020 annual bill – but the Department for Energy and Climate Change calculates that these schemes and other energy efficiency schemes will reduce overall bills by £452. So without them, bills would be £166 higher by the end of the decade. After Miliband's pledge to freeze bills, Conservative ministers from David Cameron down have been taking aim at the subsidies. In an interview with the BBC's Andrew Marr show, David Cameron said that subsidies for windfarms must not continue for "a second longer than necessary".
READ MORE: http://www.theguardian.com/environment/2013/oct/07/lib-dems-tory-renewable-energy-subsidies RELATED ARTICLE: http://typophile.com/node/100266 https://getsatisfaction.com/asiaglobalenergyreview
