Energy Crunch – system failures

July 10, 2015

NOTE: Images in this archived article have been removed.

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Warning light image via mujitra/flickr. Creative Commons 2.0 license.

Three things you shouldn’t miss this week

  1. Chart: Evaluating the Conservative pledge to “increase the proportion of tax revenues accounted for by environmental taxes”.
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  1. Article: Accused of overcharging, UK energy firms could face price cap – Competition watchdog finds big energy firms overcharge households by around £1.2bn a year.
  1. Article: Climate change plans require urgent action, government warned – Committee on Climate Change also says ending onshore wind farm subsidies early could add £1bn a year to bills. 
 
 
UK energy customers have been overcharged to the tune of £1.2bn a year, so says the Competition and Markets Authority (CMA). Nonetheless they stop short of recommending a breakup of the ‘Big 6’ companies, calling instead for a transitional cap on prices.
 
The current system is clearly failing consumers, but uncertainty in energy policy also means the UK risks falling behind on its climate change commitments. Despite progress, the latest review by the Parliamentary Committee for Climate Change warns that policy measures for future emissions reductions need to be addressed urgently as many existing measures are due to expire during the course of this Parliament.
 
This week we launched a new report, Power Failure, looking at the fundamental faults in the UK’s energy system. The overreliance on competition to deliver benefits to consumers and the mismatch between energy policy and climate ambitions are among these failures.
 
There was little positive news in this week’s Budget for a transition to clean energy. Headline energy and climate policies included a removal of both support to renewable energy firms and a road tax incentive for lower-carbon cars, as well as a review of green taxes on bills.
 
The Conservatives also scrapped their 2010 manifesto pledge to increase environmental taxes’ share of government revenue – a policy that’s seen little progress since 2010, as this week’s chart illustrates.
 
Yet there was positive news for campaigners in Lancashire and across the UK as George Osborne’s hopes for a shale gas revolution took a hit: local councillors refusing planning permission due to concerns around visual and noise impacts. The decision shows the strength of public concern on fracking as councillors went against the advice of their planning committee.
 
New government policy for onshore wind power hands the final decision on planning to the local community – will the same logic be followed on fracking? 
 
 

Related Reports and Commentary
Power failure – New Economics Foundation

Energy Crunch staff

The Energy Crunch team is Simone Osborn, David Strahan, Griffin Carpenter, Stephen Devlin, Aniol Esteban, Tim Jenkins.

nef is a UK's leading think tank promoting social, economic and environmental justice. nef's purpose is to bring about a Great Transition – to transform the economy so that it works for people and the planet.


Tags: climate change policy, Energy Policy