Five business groups have written to Chancellor Rishi Sunak urging support for businesses and consumers as energy costs soar. The groups, representing small and large businesses, bosses and manufacturers, said price rises on the horizon could push millions of people into fuel poverty. They said businesses had also been hit by steep rises in bills. The Treasury said it was helping families with £12bn support. The five groups – the British Chambers of Commerce, the Confederation of British Industry, the Federation of Small Businesses, the Institute of Directors and Make UK – said businesses were likely to be faced with further costs as existing fixed tariff contracts come to an end.
BBC 21st Jan 2022 read more »
UK energy crisis: Why renewable subsidies will help avoid price shocks. Rising energy costs have seen wind farms substantially refund environmental levies for the first time, showing they are likely to be the solution to, not a cause of, soaring bills. Amid the UK’s increasingly heated debate over what to do about soaring energy bills, targeting green levies has repeatedly been suggested as a way to soften rising costs. The boss of the UK’s biggest energy supplier wants them moved off energy bills and paid for by general taxation. Green-minded Conservative MPs agree. A separate group of Tory MPs, some of whom are critical of the costs of acting on climate change, have written that they should be scrapped entirely, later clarifying that they should at least be temporarily suspended. But a new milestone announced this week points to how these environmental levies are the solution, not the problem, when it comes to avoiding energy price shocks. The green levies, along with social ones such as efforts to alleviate fuel poverty, make up 15 per cent of the average dual fuel bill for households in England, Scotland and Wales. One of the major green levy items is a scheme to incentivise development of new wind farms, known as Contracts for Difference (CfD). Under this, energy suppliers usually pay electricity generators, such as wind farm owners, the difference between wholesale power prices and a “strike price” that is a better reflection of the cost of producing renewable energy. For example, some older wind farms have a strike price of £114 per megawatt hour. In normal times, UK wholesale prices are in the region of £50/MWh, in which case a wind farm owner gets a £64 top-up. But gas costs meant wholesale prices were so high in July to September 2021 that they eclipsed strike prices, and the money reversed direction. During that three-month period, the scheme returned funds to energy suppliers: £39.2 million, to be precise. In effect, renewable energy was helping suppress the rise in energy prices for supplies.
New Scientist 14th Jan 2022 read more »
Three quarters of households are set to see their energy bills rocket by hundreds of pounds in April when the Government price cap is increased, new figures reveal. Ofcom, the energy regulator, said 22 million households are now on standard variable tariffs, which are limited in price by the cap. That is an increase of around 7 million people since August, including around 2.3 million whose suppliers went bust. Experts said the main driver of the increase was probably households deciding to roll on to standard variable tariffs, rather than fixed-price ones, when their current fixed deals end. This is because surging gas wholesale prices have sent the costs of energy soaring, forcing energy providers to offer fixed deals that many consumers have balked at.
Telegraph 21st Jan 2022 read more »
A record increase to the government’s price cap on energy bills will affect at least three quarters of British households after seven million customers moved to tariffs covered by the policy. The number of households covered by the energy price cap has soared to 22 million, from 15 million in August, the energy regulator told The Times. Millions of households have opted to roll on to default standard variable tariffs, which are covered by the cap when their previous fixed-price deals have ended, because there are no longer any cheaper fixed deals on offer. Standard variable tariffs are capped at £1,277 a year for a typical household until April, while most fixed tariffs now cost at least £2,000 a year after a sharp rise in wholesale gas and electricity prices. Up to 2.3 million households have been moved on to standard variable tariffs over the past six months because their energy suppliers went bust, often after selling unsustainably cheap deals that lapsed when the companies failed. An announcement is due from Ofgem on February 7 and the cap will be updated again in October, when it is expected to rise to £2,400 a year. Emma Pinchbeck, chief executive of Energy UK, the suppliers’ body, said this week that it would be untenable for the government to fail to act.
Times 22nd Jan 2022 read more »
Scrapping £1bn ECO levy could see tens of thousands of jobs lost across the energy efficiency sector, Insulation Assurance Authority (IAA) warns. Ditching the £1bn environmental levy on UK energy bills which helps support household energy efficiency upgrades could result in tens of thousands of job losses across the country, an insulation industry body has warned. The Insulation Assurance Authority (IAA) claimed that 30,000 jobs covering insulation installation, manufacturing, certification, and regulatory bodies would be put at risk by scrapping Energy Company Obligation (ECO) payments on bills, after reports emerged that the government is reviewing the levy. The ECO scheme is paid for through a yearly £1bn levy on UK energy bills, with the proceeds used to fund energy efficiency measures, such as home insulation improvements, for low-income households.
Business Green 21st Jan 2022 read more »