Economy

The real energy subsidy scandal

Published

12 years ago

November 26, 2012

Simon Leadbetter

Last week’s energy bill announcement led to media headlines about increased household bills from subsidising renewables. What the media fails to mention is the scandalous subsidy already given to oil, gas, coal and nuclear.

Under the government’s levy control framework, spending for low-carbon electricity is set to more than triple between now and 2020, with around £110 expected to be added to household bills by then.

Putting that £110 figure into context, every household already subsidises fossil fuels by £138 and renewables by only £53, according to figures based on 26.3 million UK households from the Organisation for Economic Co-operation and Development (OECD).

For every pound of renewable subsidy, fossil fuels receive £2.60

This means that for every pound of renewable subsidy, fossil fuels receive £2.60. Whereas renewable energy can deliver stable prices, fossil fuels cannot. The risk of price volatility driven by oil scarcity and commodity traders, never mind the increasing effects of carbon intensive energy supply, may make that £110 seem a small price to pay.

Air pollution from fossil fuels costs every household between £323 and £760 in health costs

The narrow discussion of direct subsidy of fuel types ignores the heavy indirect costs of air pollution. The health costs could be £323 per household at its lowest estimate and £760 at its highest. This is a fossil fuel subsidy by any other name.

Storing nuclear waste costs every household £100 and rising

Meanwhile, nuclear waste storage is costing each household at least £100 and rising.

And in the wider context, at the height of the financial system bailout the sum involved was £49,000 per household or £1.3 trillion.

The alternative is limitless, clean and domestic energy

In eight years’ time, renewable energy’s subsidy will seem small in comparison to the guarantee of a limitless, clean and domestic energy supply.

Simon Leadbetter

Simon Leadbetter is the founder and publisher of Blue & Green Tomorrow. He has held senior roles at Northcliffe, The Daily Telegraph, Santander, Barclaycard, AXA, Prudential and Fidelity. In 2004, he founded a marketing agency that worked amongst others with The Guardian, Vodafone, E.On and Liverpool Victoria. He sold this agency in 2006 and as Chief Marketing Officer for two VC-backed start-ups launched the online platform Cleantech Intelligence (which underpinned the The Guardian’s Cleantech 100) and StrategyEye Cleantech. Most recently, he was Marketing Director of Emap, the UK’s largest B2B publisher, and the founder of Blue & Green Communications Limited.