Although it is relatively thin gruel, there were some positive announcements about energy in the Budget Statement. First and foremost, the Chancellor chose to keep the temporary 5p per litre fuel duty cut for another year and the planned increase in 2025-26 will be cancelled. The Government claims this measure will lead to a saving of £59 in 2025-26 for the average driver.
Of course, the sadistic activist zealots at Carbon Brief are up in arms about it, lamenting the “cost” to Government of freezing the fuel duty since 2011 (Figure 1).
Of course, they omit to mention that fuel duty brought in nearly £25 billion in 2022, so we already levy huge taxes on fuel, making it more expensive for people to travel.
The second piece of good news was the announcement of additional funding for Sizewell C. The Government claims it has provided £2.7 billion of funding to continue the project through 2025-26, but it is not quite clear how much of this is new money. However, the final investment decision on whether to proceed with the project will be taken during the Phase 2 spending review, due to complete in late spring 2025.
The final piece of good news is that the Chancellor has allocated “only” £125 million to GB Energy (GBE) in 2025-26, limiting the damage it can do. Ministers say that as GB Energy is established the investment activity will be undertaken by the National Wealth Fund (NWF). However, it has only allocated £5 million to NWF in 2025-26, rising to £50 million in 2027-28. Interestingly, both figures are only a tiny fraction of the annual average of spending on GBE of £1.7bn and £1.5bn on NWF promised in Labour’s manifesto.
Sadly, the list of bad news items is somewhat longer. The Department of Energy Security and Net Zero is going to see a massive increase in overall funding of 22% per year out to 2025-26 (see Figure 2).
The vast majority of this extra spending is on capital items, much of which will be squandered on thermodynamic abominations like Carbon Capture, Usage and Storage (CCUS) and green hydrogen.
Labour also plans to spend at least £3.4 billion on household heat decarbonisation and energy efficiency. In plain terms, this means keeping the increased subsidies for heat pumps and spending on insulation measures. Most of these insulation measures have payback periods measured in centuries, and some have payback periods further away from today than the Roman occupation.
There is a further £1 billion planned for hundreds of local energy schemes to decarbonise the public estate. For this read more solar panels on council buildings.
Unfortunately, the Budget 2024 bad news keeps on coming because the OBR has also delivered an updated estimate of the costs of environmental levies. These include the costs of the Renewables Obligations and Contracts for Difference subsidy schemes plus the cost of the capacity market, green gas levy and the Renewables Heat Incentive. The summary results, showing the progression from March 2023 through to October 2024 are shown in Figure 3.
The latest figures show overall green levies are forecast to rise from about £11 billion in 2023-24 to a peak of £16.4 billion in 2026-27, before falling back to £15.5 billion in 2027-28. This latter figure is some 122% (i.e., more than double) what was forecast in March 2023 for the same year.
These subsidies and consequential costs of renewables will find their way into our bills. The £16.4 billion peak is about £585 per household, up from £396 last financial year. By disclosing this extra £189 per year in green levies, the OBR has single-handedly trashed Labour’s claim to be cutting energy bills by £300. Note these figures do not include the costs of the Feed-in-Tariff, nor grid balancing cost or the extra £10 billion per year being spent on grid infrastructure. Our bills are going to soar.
Our taxes are going to rise to pay for all the wasted spending on CCUS, hydrogen and uneconomic insulation measure and our bills are going up even more to pay for all the renewables. If you have any money left over after this Budget, spend it on woolly jumpers.
David Turver writes the Eigen Values Substack, where this article first appeared.
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I hate green energy/net zero rubbish. Started by the Elite because they need chaos because their fiat currency system is broken.
But nuclear/uranium powered – when and where will the next one go Pop?
https://en.wikipedia.org/wiki/Lists_of_nuclear_disasters_and_radioactive_incidents
Oh, and don’t ever mention how/where to get rid of the waste.
Have you seen how much cleaning up Sellefield (cunning name vhange from Sellafield) is costing?
Thorium should be used, not uranium
Hello there. Have a look at Linear No Threshold – LNT. Ban the bombers saw chromosome damage in increasing radiation dosage from high to very high, so they extrapolated the line joining those two points back down to zero, and concluded that any radiation was dangerous. This turns out not to be the case. Nuclear is really very safe, and has the best energy density and smallest footprint.
I realise skeptics should be cautious of links, but try this:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2663584/
Interesting, thank you..
More money from the poor to the rich in the name of saving the planet.
Something Julian Assange warned about.
A slightly related point… doesn’t Ed Milliband look a right tit wearing a hard hat?
Bricklayer here! Most of us do
Haha – I think they gave him one a few sizes to small just to make sure it looked good on him, either that or he’s a cone head!
Surprised he is not wearing a face anus wrap against the scariant….would fit in perfectly with the photo above (bulging eyes etc)
It does seem that this net-zero scam is being used to bring in ever more ‘Big Government’. This whole thing seems to be a state run hoo-haa as much as any collectivist project in the old USSR. In my view we need minimal state intervention and operation, all the Government should do is set and run the rules and laws, everything else should be left to the markets. Instead this whole climate change business is seeing an ever more stultifying spread of the dead hand of state intervention.