Energy suppliers have told Ed Miliband to increase the cost of gas boilers to boost the uptake of heat pumps and electric vehicles – because nothing says ‘good product’ like deliberately increasing the prices of competitors. The Telegraph has more.
In a letter to the Energy Secretary, suppliers including EDF, EOn, Octopus and OVO warned that a typical household paid four times as much per year in levies on electricity usage than on gas usage.
This makes it less financially attractive to switch to electrically-powered heating and transport, they said, even though Ministers want households to adopt EVs and heat pumps to help reduce carbon emissions and Britain’s dependence on natural gas.
The suppliers, supported by charities including Citizens Advice and National Energy Action, called on Mr Miliband to urgently review the system and “rebalance” levies so that they were more evenly spread between electricity and gas usage.
In practice, this would mean charges on gas bills would have to go up for millions of households.
The intervention came as the cap on a typical dual-fuel household energy bill rose by £111 a year to £1,849 on Tuesday.
In their letter to Mr Miliband, around 30 organisations including suppliers, investors, industry associations, and charities in the Electrify Britain campaign said: “British people and industry are paying some of the highest electricity prices in the world.
“We ask that you initiate a consultation process to urgently address Britain’s high energy bills. This should include policy levy reform.
“If the Government wants people to adopt electric cookers, heating and cars, it must stop giving older technologies and fossil fuels a de facto subsidy over electricity.”
While a typical household with a gas boiler pays about £250 per year in levies, this would rise to £480 per year if they adopted a heat pump. The letter’s signatories argued this makes no sense, given that using electricity is four times more energy-efficient than burning gas.
The Government has been examining potential reforms of green levies on energy bills for years, with a review initially started under the previous Conservative administration. However, the various options all look politically difficult.
One option often favoured by energy companies is to abolish the levies altogether and fund Net Zero schemes from general taxation instead. This would mean households progressively pay more depending on their income.
However, that would require Chancellor Rachel Reeves to break Labour’s promise not to raise taxes on working people. The suppliers admitted in their letter the “current economic environment” meant this was “likely not possible”.
Alternative options include either shifting specific levies over from electricity bills to gas bills, or combining the cost of all levies into a single pot and then deciding how the total should be split. …
On Tuesday, a spokesman for the Department for Energy Security and Net Zero said: “We are looking at a range of options for longer term energy market reform, including the rebalancing of gas and electricity prices, with the impact on consumers at the heart of our approach. We will set out further details in due course.”
The letter coincided with the reintroduction of the so-called boiler tax scheme, officially known as the Clean Heat Market Mechanism. This requires suppliers of UK domestic gas or oil boilers to increase their share of heat pump sales each year between now and 2029 – or face fines potentially totalling millions of pounds.
It was dubbed the boiler tax because the fines could only have been paid by increasing the price of boilers by an estimated £120.
Worth reading in full.
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This chicanery is never ending. I’m glad I has a new boiler installed, which should last me many years to come.
I hope Eddy-baby doesn’t tax the gas to make it uneconomic. Still, there’s always the ballot box – or the barricades.
We’ve tried the ballot box without success.
I’m glad I have a wood stove!
Is there anything more obscene than the concept, pushed it seems, solely by the eco-nutters that a lack of taxation is a defacto subsidy. No, no, no a subsidy is the bribery to buy at a reduced price funded by someone else paying for it. Paying an untaxed market price is just that, buying at the market price but let’s not forget, even gas is heavily taxed already.
The economic success of rich world countries has facilitated a huge number of supposedly educated people not understanding what a “market price” is.
Subsidies come and go at the whim of government as the EV owners will realise. I cannot commit to a ten grand heating appliance to replace the current boiler no matter what the alleged savings particularly for crap technology so the answer will always be a no from me.
Alleged savings of £100/year. So you only have to keep it for 100 years to break even. Come on man, show some ambition!
Ah. Dammit. I forgot Kim (funny, she doesn’t look Korean) Leadbeater wants us to go on the cart sharpish.
Exactly.
This is the electricity supply companies trying to demand the government change the tax on their competing product to increase their profits. This is a despicable, disgraceful demand and these companies should be told where to get off.
A couple of things here:
1) ‘household with a gas boiler pays about £250 per year in levies‘. Why? Isn’t the VAT they charge on energy enough tax? Why is there any additional levy? When we use more energy the levy nearly doubles.
2) ‘using electricity is four times more energy-efficient than burning gas‘. I doubt this. If the electricity is produced from gas then this statement cannot be correct – it’s impossible to convert energy 100% efficiently. If the electricity is generated from wind or solar then the necessary gas/nuclear/battery (ha!) backup has to be accounted for too.
The levy, I presume, is the carbon tax which is calculated per tonne of C02 emitted in the process of producing something, be that energy, steel, or a fridge, for example.
It is a Pigou Tax meant to correct for the externality arising from the “damage” to the climate. It cascades down the production process to end up with the consumer – the intention being to increase prices and change habits.
Producers will be encouraged to use “green” low/no carbon dioxide emitting energy and materials to lower costs and sell at lower prices. Consumers will steer away from high (carbon taxed) products to lower priced ones.
Electricity because it burns gas and coal is rated as high emitting production so electricity is taxed when produced, whereas gas cannot really be carbon taxed as it is produced because the prices has too many steps. So instead a carbon tax is applied to reflect the C02 emitted when burnt by consumers. They are working on this though. I am speculating a bit here because these lunatics do things not easy to follow.
The energy efficiency relies on air/water heat pumps using 1kW of electrical input, to extract the equivalent of 3kW of heat energy from the air.
However that assumes perfect conditions. The efficiency will fall with outside temperature and increased level of humidity in the air.
It is also meaningless without reference to the space to be heated and the indoor ambient temperature required, and the output the unit can supply. A 1kW electric fire might be efficient heating a small room, but not the Albert Hall.
Energy efficiency gives no information about cost efficiency without comparing the cost of the input energy.
Also, merely comparing efficiency of the domestic unit, heat pump v gas boiler, fails to take into account the energy loss that occurs between the electricity leaving the power station and arriving at the point of use. The loss depends on a number of factors particularly distance, but is reckoned to be between 8% and 15%. This is important when considering wind production off-shore and remote on shore locations, or electricity imported from other Countries
There are no transmission losses with gas, so even if the gas boiler is less efficient at producing heat from gas than a heat pump producing heat from electricity, the electric transmission loss has to be subtracted in which case there won’t be much difference.
It helps to understand that Physics and Economics have been abolished when it comes to Net Zero.
“It helps to understand that Physics and Economics have been abolished when it comes to Net Zero…”
…Nemesis can’t be abolished, only deferred.
Thanks, you saved me the bother.
Heat pump output is nowhere near four times better output from a gas or oil boiler based on recent improvements in gas and oil boiler efficiency. Anyone who believes that it is has been duped by propaganda from Miliband and his army of nutters or others gaining by profit from people installing equipment believing that stupidity.
Electricity suppliers want their main competitor made uncompetitive. How unusual.
And the same sort complain about Trump’s tariffs.
However: said electricity suppliers demanding we be forced to use more electricity, are constantly advertising to tell us to use less.
We shouldn’t be paying any levies for what is a fantasy!
more of a nightmare I’d say!
Doubleplusbad doublespeak doublethink from the fork-tongued, state-sponsored energy extortionists. Oozing snake oil.
Missing from all the usual sycophantic word saladry is any mention of the significant inherent energy-loss in burning gas to generate electricity, rather than using the entirety of the gas to directly heat homes and cook food.
Meanwhile the laptop warriors of Citizens Advice, National Energy Action and other energy charities are now in-effect campaigning against citizens. Will the curtain ever fall on the Dark Theatre of the Energy Absurd?
Is EDF owned by France?
is EOn owned by Germany?
is Octopus an renewable asset management company?
And is Plan Zero OVO’s response to the “climate crisis”?
If the answer is Yes to those questions, why the Telegraph has not disclosed them?
Green Energy Cripples your Finances
What a wanker.
And a plane ticket to leave this 3rd world shithole cost around 24.99, and cottages/apartments in Spain, Portugal, Italy, Czech Republic, Slovenia, Greece cost half of stupid English prices.
The CCCP would be proud
This is truly shocking. Aren’t we already paying some of the highest prices for energy in Europe, or even the world? The fact that these companies would even dare to openly suggest such a scam to the politicians shows that they are all in cahoots against the common man.
How about someone telling these net zero zelotes that CO2 is not the cause of global warming, that CO2 is good for the planet because plants thrive on it, and there’s absolutely nothing man can do to alter global temperatures anyway. Spare us the madness of crowds.
The only way you will get those facts through the skulls of these idiots will be with the aid of a mallet and a tent peg.
Even then their brains, if they had any, would turn to mush.
It’s another case of rearranging the deckchairs on the Titanic. It doesn’t matter where they put (or hide) all these “green” levies – we’ll still be paying more for our energy than most other nations. Our industry will still be unable to compete. We’ll still get poorer. Our living standards will continue to decline.
Why do I blank anything written about Ed Milliband? Just cannot be bothered.
If stupid Miliband does put extra tariffs on gas to falsely make it more expensive than electricity, I hope it must be shown on energy bills as a separate item, so customers can see the amount and the ridiculous reason. Sack Miliband, he is costing the country and its population a fortune and destroying our manufacturing industry with the jobs that go with it.
Good point – we need it to be really clear to everyone that the government is effectively putting its thumb on the scale to skew reality