Rising energy bills are fuelling a difficult Christmas for families
4 min read
Christmas is always an expensive time of year, but as a result of a Brexit fuelled cost-of-living crisis this year could be the worst yet. As inflation continues to soar, one of the biggest increases households are facing is to energy bills. Currently, electricity prices are 18.8 per cent higher than in 2020, with gas prices 28.1 per cent higher.
Rather than pass legislation to lower energy bills, this UK Tory government is pushing forward a bill which would increase energy bills for the betterment of energy companies.
This stems from, in part, a Tory commitment to nuclear power which has persisted despite concerns over value for money and concerns over long-term nuclear waste storage. Furthermore, their flagship nuclear project at Hinckley Point C - estimated to cost between £22bn and 23bn, a 30 per cent increase from its original cost – has also been delayed by another year.
Further nuclear projects at Wylfa, Oldbury and Sizewell have also been abandoned over financing concerns. Despite the vast subsidy this Brexit-obessed government was willing to give French national energy giant EDF for Hinkley, the reality is that nuclear is not cost effective and EDF want to transfer more risks to energy bill payers.
This is where the Nuclear Energy (Financing) Bill comes in. This bill would allow for the government to introduce a mechanism which would allow energy companies to pass the cost of a future power station to their current consumers. The Regulated Asset Base model of financing means that consumers start paying as soon as construction begins, then when construction is completed, a 60-year contract payback contract is entered. This means the potential of a 75-year contract on a power station that will, at best, be operational for 45 years.
Approximately a quarter of our electricity bills consist of levies. It is unacceptable to foist another £20bn+ nuclear station onto our bills. The myth is that nuclear is required to provide baseload - however, given that seven of the existing eight nuclear power stations will have shut down before Hinkley becomes operational, and that the majority will have shut down in the next couple of years, this alone debunks the baseload argument. Nuclear is too inflexible to operate with intermittent renewables, therefore alternate storage technologies should be considered, particularly pumped storage hydro. There are schemes ready to progress in Scotland – all that is needed is an agreement on a minimum price of electricity; levels way below the strike rate agreed for Hinkley.
Work on energy efficiency in England is far behind the Scottish government
Tidal stream generation can also provide baseloads to the levels that nuclear can. In the future, wave technologies will become advanced and hydrogen production will provide a mechanism for making use of excess electricity while creating storage opportunities when the wind doesn’t blow.
Tom Burke, of climate think tank E3G, has warned this bill represents "a very bad deal for consumers" and that investing in overcosted nuclear might "inhibit the market in wind, [an] area where we have the opportunity to create a global competitive industry in the UK".
As we face rising levels of fuel poverty - with increases to the energy cap of circa £500 next year likely to push one million more homes into fuel poverty – this UK Tory government must find ways to reduce bills, not place further burdens on them. Their work on energy efficiency in England is far behind the Scottish government, whose classification of energy efficiency as infrastructure in 2015 has led to increased investment and has been praised by stakeholders and the Westminster Business and Energy Committee.
The SNP has called for an emergency energy payment to help those facing a cold winter. The Treasury has benefited from the increase in energy prices in the form of VAT returns, additional fuel duties and additional oil and gas revenues. They need to use this to support consumers but, incredibly, they have allocated £1.7bn for the development of Sizewell C, so they can then sign a contract of 70 to 75-year duration. A radical rethink is required before it is too late for us as consumers, and to prevent billions of pounds being wasted that could have been invested in renewables to keep us on the pathway to net-zero.”
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