/ Home & Energy

How will we pay for the Energy Bill? With our energy bills!

An illuminated light bulb on green grass

Excuse me while I have a Dr Evil from Austin Powers moment, but – ‘one hundred and ten b-i-l-l-i-o-n pounds’. That’s what the government thinks we need to update our ageing energy system and keep the lights on.

It sounds like a lot of money. No, let’s be clear, it is a lot of money. So the natural next question is who’s going to foot the bill? And the answer? Yes, you’ve guessed it, we will.

Not through our taxes though, oh no. The cost of ensuring that energy companies invest in new energy generation is going to be added to our ever increasing gas and electricity bills.

Investing in the future

This investment is needed. None of us want power cuts to be a feature of our daily lives. And since our creaking energy infrastructure needs a major overhaul, it makes absolute sense to ensure that we’re reliant on cleaner, greener alternatives in the future – such as renewable energy and nuclear.

Meanwhile the cost of doing nothing and relying on importing gas from overseas could be just as – or even more – expensive. This is why the government’s Energy Bill, published today, is so necessary.

Keeping a close eye on costs

My point is that we’re being asked to collectively cough up billions to pay for this investment (businesses will foot the bill too). It is only natural that we expect some assurances from the government that it will be delivered at the lowest possible cost..

This requires some basic things to be put in place. There needs to be transparency about the contracts negotiated between the government and energy generators. There’s got to be scrutiny of the decisions made by ministers with a clear role for consumer representatives to make sure that contracts deliver value for money. And contracts need to be presented to Parliament before they are signed, to make sure that the government is held to account for their decisions.

You would expect this for any other major public project. Think about the level of scrutiny that the Olympic Games costs were put under – and their budget was £9.3 billion. Or think about how the £3.6 billion High Speed Two rail project costs have been put under the microscope.

With energy prices right at the top of your financial concerns, it is absolutely vital that ministers make sure that this process is as rigorous and robust as possible. And Which? will be poring over the Bill over the next few weeks and pressing for it to be toughened so that affordability for consumers is right at its heart.

Comments
Member

These Thousands of wind turbines are going to need renewed in 25 years time, given they have been built with government subsidies and they are £50K a time why should the public have to pay the energy companies to renew this short term misguided policy by Governments. These token gestures to green energy are totally in effect experiments the whole policy is flawed.

Member
alex hardie says:
30 November 2012

Tthe policy the Government is embarking of is one that shows they have no social conscience once again the poor will pay for rich peoples energy. Massive grants are being given to rich landowners to install wind energy projects, one of my multi millionaire neighbours is now getting free energy and making money form the grid while the rest of us see increases see in our electricty bill. I believe the Government should help with research to help with new power technology but to support companies who could not survive without public subsidy is just making bad companies wore

Member
2squirrels says:
30 November 2012

How often are we supposed to change our insulation, windows, low energy appliances, draught exclusion etc. we know sooner do it than they come up with another move of the goal posts. I think there have been 4 different gaps and types of glass for double glazing which is ax major expense, once lofts are insulated they become either another room or store age so very difficult to redo, if walls have insulation put into them how are you supposed to get it out and redo it. There are many silly suggestions we can only go down that Road once. Constant changes of government and policies is a very big problem in the UK as each time future plans and policies are changed and money wasted.

Member

Suddenly out of the blue comes this…I do not trust anymore this government’s plans…how much extra profit do the big Energy Companies make out of this idea…???

Member

Surely future investment should be made only by the companies that provide our energy? The government could pledge to support them if needed as it would be a massive investment, but they’ll be continuing to make profits in the long term, won’t they? We seem to have an odd system of many industries that we feel we can’t survive without, banking, energy, post offices, public transport to name a few, so we expect the government to support us (the public) by making sure that we get a ‘fair’ deal. It seems we’re stuck halfway between wanting state owned on one hand, but also wanting the competition that private ownership brings, and the government not wanting the responsibility, although they step in when things go horribly wrong and we all get fed up! Surely this sends mixed messages to both the provider and the consumer about who is responsible for what and really only gives us the worst of both?

Member
Keith Clark says:
2 December 2012

The problem with this idea is so many of the energy companies are foriegn owned, assisting them would be similair to shovelling foriegn aid without any real controle as to how the money is spent, the fault lies originally with Maggie Thatcher whoes idea it was to sell the nationalaly owned companies off into private hands thus allowing them to gradualy be owned by investors abroard who saw a very rich gravey train in the offing

Member

I’d prefer to blame all subsequent governments for not buying up shares here and there once the badly performing energy companies had been turned round.

Member

William

I don’t believe that the government needs to buy shares in the companies. What it does need to do is to regulate their operation properly, and get a move on doing this.

Member
Peter Elliott says:
30 November 2012

Energy minister Ed Davey has unveiled the government’s much-trailed Energy Bill, setting out the roadmap for the UK’s switch to “a low-carbon economy”.

Energy firms can increase the “green” levy from £3bn to £7.6bn a year by 2020, potentially increasing household bills by £100.

Question: If this “levy money” is being used to re-generate these energy firms, then surely the households have some rights to become shareholders via their contibutions ?

Member
Torboy says:
30 November 2012

Unfortunately Pete Moorey’s comment “businesses will foot the bill too” is not entirely true. The strong indications are that the Government is planning to exempt from the levy THE MOST POLLUTING INDUSTRIES. Why? Because they threaten to leave these shores if called upon to make their fair contribution. The same argument we get from the venal tax avoiding rich. Clearly an effective argument.

Member

Why are we concentrating only on major production of energy? If new homes had to have solar panels, super-efficient insulation and double/triple glazing and maybe even water harvesting systems fitted, households would cut down energy costs substantially. I KNOW this would mean that houses were more expensive, but surely that would be outweighed by a lifetime of lower energy costs!! Of course, it would also mean that the energy companies couldn’t make so much money out of us, so I suppose it’s a non-starter!

Member

Some of the governments proposals are good but the one which would limit suppliers to only 4 tariffs will have serious unintended consequences.. Some companies now have a tariff that has no daily charge so if you have a garage with its own supply which uses 2 kWh a year that is what you pay for. If the number of tariffs is limited then these types of tariff are likely to disappear altogether, to be replaced by one with perhaps 17p daily charge, an increase of perhaps 100 times or more.

Member
George Taylor says:
30 November 2012

Alternative sources of renewable energy are a must, but one course – wind farms – must be carefully sited.
Furthermore, why does the government heavily subsidise multi-billion energy suppliers over wind farms and solar panel farms, but not alternative sources that harness the power of the sea and rivers: a much less intrusive source? The wave hub off the Cornish coast – where developers of wave/river generated energy could test their products – was heavily subsidised by the government is no longer receiving subsidies and will fail.
If subsidies were removed for wind farms today, the energy companies would not cease to build them… a quick and easy source of profit for them.
We live under the threat of a proposal by EDF to build six of the tallest wind turbines in Torridge District, if not Devon, on truly urban farmland that is quiet and dark at night and bordered by three villages, two hamlets and many houses that stand alone.
Hundreds of people in this one project alone will suffer noise pollution, the distraction of these giant structures on the few occasions when they revolve, horse-riders can forget their country hobby, and it will introduce a further eye-draw for drivers on the busy, accident-prone, main A388 road. So high, they will be seen from Dartmoor.
It has been proved that the value of individual’s main asset, their home, will be reduced… and for older residents wanting to down-size, it might well be impossible to sell. It would have been less of a covert operation had the farmer-developer asked us all for our bank debit cards and pin numbers!
The future operation by EDF does not b ode well. When asked at a public meeting about a resident who would be badly affected by the flicker effect off the revolving propellers in sunlight, the EDF project manager replied: “He could pull down the blind.” Realising that this had not gone down well with those attending, he made it worse by saying: “He could block up his window and move it to another side of the room.”
Energy companies are bombarding Torridge District Council with planning applications for wind farms, in the knowledge that the council does not have the money to fight appeals.
Yes, wind farms by all means, but in the right place. Their proliferation will ruin tourism in the West Country… just look at the view you get when approaching the borders of Scotland… dozens of massive white monoliths scattered over the mountains.

Member

Do you have figures which show that tourism has magically evaporated from Scotland because of “dozens of massive white monoliths scattered over the mountains.”?

I actually like the things – in a landscape so marked and changed by millenia of human activity, it’s nice to see a positive change – but I have seen NO evidence that their presence diminishes tourism, and doubt you have either , so the argument is yet another spurious one promoted by the Noel Edmonds of the world.
[PS I live in Dartmoor National Park, and would be most happy to have a turbine farm on the adjacent hillside – whilst I may not be in danger of being engulfed by rising sea levels, plenty of the most disadvantaged are].

Member
Bert Jones says:
30 November 2012

11mm (less than half an inch!) rise in sea levels so far in years. Will anyone anywhere notice this?

Member

Aren’t the Germans pulling out of wind farms, something to do with insurance claims when the main power stations failed to pick up the slack quick enough with the wind stopped ?

If all this green stuff was so wonderful, why do companies need government money? CMCs didn’t need any government money when they started pestering people over the phone.

Member
P. Abbott says:
30 November 2012

Yet another government c**k-up that will cost us all dearly, why do I get so many calls about government grants for solar subsidy and free loft insulation – because the power companys make a fortune from it and it’s not a government subsidy – we all pay for it in government agreed increases in our power bills! Disgraceful!

Member

I am fed-up with people blaming whichever government is in power for the problems of the day. In some cases, these problems may largely be due to the actions of a previous government.

I would like to see all-party support for how we handle energy supply, since it involves long-term planning and affects every one of us.

Member
Member

Would it not be possible to have exercise equipment that generates electricity? With a supposed overweight population, 2 birds with one stone, no ?

Member

What have you in mind? Perhaps an exercise bike with an alternator, in front of the TV so that ‘couch potatoes’ would have to pedal away to watch Coronation Street. 🙂

Member

I’m thinking more along the lines of something to store up a charge, and then discharge it back into the grid, I’d hate to think a couch potato missing that crucial plot twist just cos they stopped peddling to catch their breath.

Member

I’m concerned that with too few tariffs that we will end up paying more!. Will there still be an Econmony 7 tariff? Will there still be a “no standing charge tariff”? Surely there is a half way measure between far too many tariff (what we have now) and allowing the consumer a choice that best suits their energy consumption.

Member
Bert Jones says:
30 November 2012

The energy companies will still need the same revenue, so overall we will be no better off. They will design a new system of tariffs to make sure they do not lose out.

Member
acglos says:
30 November 2012

richjenn13 appears to miss the point regarding wind farms.

We aren’t being forced by government to subsidise wind farms because they’re rural ornaments. They are supposed to provide a reliable source of electricity. The truth is that they fail to provide, dismally, when the nation needs them to do so. If the wind blows too strongly, then they again fail to supply.

We have seen one or two explode spectacularly, burning like a Catherine-wheel display, but that’s not a desirable feature worth the expense either.

So let’s get serious, wind farms are never going to pay for themselves but they will be a constant drain on our energy bills. The money would be better spent on any of the alternatives.

I challenge the Energy Minister to show some b***s and put a stop to them immediately.

Member
Mike H says:
30 November 2012

Many of those corresponding are obviously missing the point here. If you want to use Electricity and Gas then you either pay up through your bills or you change to other forms of power such as a wood buning stove etc etc.

As a country we are all, with very very few exceptions, relatively well off. Everyone has plenty of the appliances that we just plug in, or get fitted, and use the power that is supplied. If we wish to maintain this convenence then we have to pay for it and what can be fairer than those that use it pay for it.

Which and Private Eye I am sure will continue to do an excellent job of keeping those in charge on their toes. This is how it should be.

Member
Bert Jones says:
1 December 2012

You have more confidence in these organisations that I do.

Member
David R says:
30 November 2012

My gripe is with the advice given on how to insulate your home. Every article I read seems to go throught the usual mantra – insulate your loft/walls, cut down on draughts and fit a new boiler.
What if you have done all of these.? I have a 1930’s semi and need more specific advice. eg I don’t want to rip out the old wooden windows . . what is the best type of secondary glazing? What about ventilation when all the draughts are stopped? How do I make the most of solar gain on the south side of the house? How much heat is lost up an an open chiminey? What are the best settings for the central heating etc etc. This specific sort of advice seems to be lacking.

Member
retired says:
30 November 2012

I also cannot improve my insulation etc living in a modern apartment – it’s all done – but I’ll end up paying £100+ annually to support ‘green’ energy for decades to come (I believe this is only the thin end of the wedge!)

I’m not convinced we have that much effect on what’s happenning to ‘climate change’ anyway. Look back in history and see the different weather conditions they had – the river Thames froze in Tudor times.

Member
Keith Clark says:
30 November 2012

I was dismayed when a ban was placed on the old type filament bulbs, We are two of the many thousands of persons who are totally deaf and use a Mount Castle flashing light system, this makes every single light In the house flash on if its off (daylight time) or flash off if its on after dark, the energy savings bulbs are useless with this system being too slow so we have stocked up with the old bulbs and intend to keep on using them as long as they last, I feel a small supply of these bulbs should continue to be manufactured for persons like us as the only other solution I know of it to buy a wireless unit tuned in to several lamps placed around the house but this method would cost several hundred pounds as apposed to my faithful old unit purchased in 1958 for £5 and has operated faultlessly ever since an added bonus is it can also be wired up to the text phone or smoke/fire alarm at no extra cost

Member

The cost of a new system will be recouped by the money you will save using energy-saving lamps. It’s time to move on.

Member

Whilst I’m inclined to agree with Wavechange about the system being replaced potentially costing less than the savings made by using cfl lamps, I am acutely aware that often there is no direct replacement for assistive technologies and the currently available products are often inferior to, or at least take years to become as adept at using as, the existing system.
This isn’t the place to have a debate about modern assistive technologies but it is perhaps something that the likes of Which should look into when sweeping changes (such as banning tungsten lamps) are proposed.
However, back on topic, I doubt very much that either the number of assistive technologies in use make a detectable impact on national energy use nor that upgrading all such items to new “efficient” versions will have the slightest impact on the need to either generate more or use less.

Member
A J COLEMAN says:
30 November 2012

I can sympathize with David R.I have suffered from the HETAS,OFTEC and other state run “we know how to do it EXPERTS”.
19th Century house,own land,no one near.Three double doors,Two single large doors.22 windows,8 1m velux’s.
Oil boiler,35 sec oil,two large wood stoves.22 radiators,no thermostats,external temperature sensors.3000 l oil tank ,60 m from buildings not right.
Running for nearly 42 years,1 boiler and 1 valve replacement.

The modern EXPERT WIZARDS tell me ” needs more air.More air at 30 C into boiler room.
Holes in 30 inch walls for the wood stoves.

None of the EXPERTS can show me the mathematics to make this all work ,not even for one hour, but for 42 years.

The EXPERT,drives a desk for the bureaucrat,like the Insurance salesman.Something,I know not what,may happen,so do this.
The impossible we do immediately,miracles take a little longer like 42 years.

Member
Bert Jones says:
30 November 2012

I also have a “modern” central heating system with a boiler that is now 42 years old. I have been advised for the last 30 years to have it changed for a more efficient one, but have resisted for good reasons. If I had had it replaced, I would have needed about 3 or 4 “new” ones in it’s place.
The whole busines of replacing boilers with modern, so called more efficient ones, is a total con. Millions of £ are being wasted on the advice of so called experts who convince the innocent that huge savings can be made by fitting a modern boiler.
My boiler is about 65% efficient, but the heat “wasted” is not wasted. It stays in the house. It warms the airing cupboard. Being in the center of the house, the heat that goes up the chimney also heatsthe whole of the house. If I replace it with a new one, I have to fit more radiators to compensate for the loss of heat that is not lost.
The only heat that is actually lost is around 3 to 5 % that finally exits the chimney.

Member

There is no doubt at all that these constant pressure-sales to try to get us all to buy new appliances is a pure con.

It’s put in place purely to try to mask the real issue, and happens to make a fat profit for the manufacturers as a ‘happy’ (sarcastic tone) by-product.

My mum and I have boilers that are 35 and 33 years old respectively, and neither has ever broken down once. What’s more, we both enjoy gas bills which are considerably LOWER than many friends and neighbours who have “upgraded” to an “efficient” boiler and now find that they are using more gas.

British Gas themselves have told various people (some of whom have quoted BG’s letters on other convo’s) that new boilers will never actually use less gar, and the Energy Saving TRust wrote to me and told me that “All new [white goods] and boilers use more [electricity] and gas than their older counterparts “due to the new features”.

There is only one way to save energy and that is to be less profligate with it.

It is a parallel situation with weight loos – a person will only ever lose weight by either consuming fewer calories or by burning off more calories (or both at once for faster results). Miracle diets and magic c pills do nothing at all. Energy consumption is no different.

Wavechange makes a point elsewhere on this convo about being fed up of people blaming the government of the day and the need for all-party collaboration on this issue: he’s right but I would add that it doesn’t need all party collaboration, just a government will guts, to do some basic things that would have an overnight effect. Three such things are:
1) an outright ban on all forms of outdoors heater – of the types that you see outside pubs and so on to warm up smokers on the pavement.
2) (assuming that CFL’s – widely debated on other convo’s – are really going to save energy) an immediate change in the law so that commercial and industrial operations are forced to switch to CFL’s like domestic users have been – rather than being exempt as they are now and being allowed to continue to use tungsten lamps as much as they like.
3) a return to the “public heating seasons” for all public buildings – i.e. no heating appliances or central heating in shops, offices, libraries, schools, etc., between May 1st and October 1st – instead of the current ludicrous position where heating is often on all year round, with air con running against it in warm weather.

There’s plenty more ways that we can all reduce consumption and actually, you know what? 99% of people would not even notice the changes if they were done FOR them – it’s only because everyone has to physically DO something themselves that they even notice at all ….. and then out comes the whinge brigade.

Alternatively, as plenty of others have said already, keep on wasting gas and electricity to your hearts content, but shut up being NIMBY and accept the turbines, solar panels, nuclear poser stations, smoke stacks and all the rest outside your window.

There is no “third way”!

Member
Bert Jones says:
1 December 2012

My 42 year old boiler has also never broken down once. I live in the knowledge that at some time it may fail by a leak in the boiler body, and a replacement will cost around £6,000 as I will not be allowed to place a new one in the center of the house, which is where it should be. The cost is inflated because of the extra plumbing needed to move the location to an outside wall.
Which? have missed the boat when they tested boilers. They were tested as individual units “in a box”, and failed to observe that the so called wasted heat was not wasted. I communicated with them but they did not understand. I have also had communications with the editor of “Gas News” who, as expected, agrees with this analysis, but accepts there is nothing that can be done to rectify the current situation. I even obtained, with some difficulty, the legislation document, all 74 pages, and it is based on the ridiculous concept of boiler efficiency in isolation from the actual installation.
But spares are not available, or difficult to find. The only working part is the gas valve, which can not be replaced with an identical one, but Honeywell have an equivalent that can be fitted.

Member

Bert

It would be relevant for Which? to mention that the boiler installation will affect the efficiency of the system but most people wanting to replace a boiler will have little option unless they carry out major changes to their house.

Dave D. has frequently pointed out other relevant issues, such as the unreliability of modern boilers and the fact that they can have a much shorter service life than the old ones that the three of us own.

The principle of a modern condensing boiler is good but various problems need to be addressed. Installers should be aware of the need to avoid condensate freezing in cold weather, but it’s up to the manufacturers to tackle the problems of poor reliability and short life.

Condensing boilers do recover heat that is wasted by older designs but undoubtedly there is scope to recover more. Where to site a boiler is something that builders and those involved in house refurbishment should give thought to.

Member
acglos says:
1 December 2012

To all of the guys writing here regarding old gas boilers. I too have a reliable old fashioned boiler (approximately 25 years) sadly no gas fitter wanted to move it to suit alterations to the building. They all steered me towards new condensing boilers at huge expense.

A very quick calculation showed me that it would take at least twelve years to break even before I would enjoy any saving due to the claimed efficiency improvements! Naturally I was somewhat reluctant to go down that road. Casual research locally and asking friends revealed some horror stories regarding boiler failures, incapable repairmen, frozen condensate in flue outlets etc. Clearly this was not the way to go.

I have since abandoned my old gas boiler (reluctantly) and installed twin 215 litre buffer tanks heated by immersion heaters on economy 10 tariff, with the options of also connecting any or all of the following to the buffers: multi-fuel stove, heat pumps and solar thermal.
So far installation has cost me less than half of the cost of a new condensing gas boiler. I don’t have any worries regarding boiler failure / frozen flue / calling out Gas Safe repairmen / carbon monoxide poisoning / gas explosions and after six months useage I’m on target to match last years cost for running on gas! I suppose immersion heaters are inherently close to 100% efficient, and certainly more reliable than any gas boiler can be.

So don’t lose hope guys, there are viable alternatives if your ‘old faithfulls’ do eventually give up the ghost.

Member
frankhanley says:
30 November 2012

Profits made by the Electric & Gas suppliers should pay for the new plant & stations

Member

They do, although they’re short sighted enough not to use existing profits but rather increase the cost and use these new profits. 🙁

Member

I cannot see the point in this debate, you can insulate a home completely but at some point need to switch the heating on.If the current increases in gas and electricity continue at the rate since 2005,no one other than the rich will be able of afford to heat their homes. It is outrageous that heating is becoming a luxury for a lot of people,alongside a roof over your head and food to eat it is a basic of life. I feel the government has totally lost the plot on this issue as naturally they are not affected by price rises having ample income to pay increases. I just wish people in Britain would take to the streets like our continental neighbours(not violence) to show our parliament that we have all had enough!

Member

I do agree with Which? that consumer interests need to be put at the heart of the energy bill if they are going to be asked to cough up through their energy bills to fund what is needed. In particular I do feel consumers will need to be somehow shown, up front and all along the way, that improvements under the bill do genuinely offer the best value for money means to meet UK’s energy needs taking least impact to the environment also into account as well as possible breaking up of UK. Also I feel domestic consumers, need to be properly protected aginst being ripped off by their own energy supplier(s) as compared to other energy suppliers – ie to make sure all folk pay the same contribution regardless of how active their current supplier may, or may not, be in making improvements under the bill. Therein however lies a fundamental question – bearing in mind the future beneficiaries of projects completed under the bill should folk pay for it by family, by household, by person etc and who should be exempt; toddlers, teenagers, unemployed, vagrants, addicts, pensioners, handicapped, prisoners, MP’s, Royalty, lower wage earners etc etc. Another question it seems to me needs sorted out up front is whether business (large and small) and government (central & local) consumers should pay for the projects needed as well as domestic consumers. I personally don’t see why they should not although the business/government costs in doing so will no doubt feed into the price domestic consumers pay for goods and services but making them pay a fair proportion according to the significance of their carbon consumption should at least focus their efforts on reducing business/government waste of energy and thereby ensure project costs for us all are reduced – as energy capacity needed should be reduced.

Member

will those who’ve tied in come out worse for having done so, when measures Which described in recent newsletter are put into place?

Member

If you’d like to talk exclusively about wind farms, our latest Conversation may pick your fancy: https://conversation.which.co.uk/energy-home/got-a-wind-farm-nearby-you-could-save-on-your-energy-bills/

Member

With all the debate about wind energy showing that there are some doubts as to the total cost efficiency both in generating and building the wind farms WHY is there no mention of tidal wave generation. With the Bristol Channel/RivernSevern having the second highest tidal range in the world, – some 50feet- surely the tidal barrage suggested some years ago ought to be re-visited.? Again it would be costly to build but once installed the generation could be relied upon throughout the twentyfour hours. Having had Solar Panels fitted in July this year I am already benefitting from the sun and have already had a credit electricity bill in spite of the very poor summer!! Government help for ALL householders with a south facing roof to install panels would surely be a good idea?

Member

Ken Thomas – tidal energy seems an under-exploited resource. I wonder why – it may be much more expensive. Wind farms are inefficient in the main, private solar panels are expensive and, until recently, their feed-in tariff was ludicrously high (at our expense).
Some interesting information on tidal energy can be found at:
http://en.wikipedia.org/wiki/Tidal_barrage

and

http://www.energy.siemens.com/hq/en/power-generation/renewables/hydro-power

Member
John H Hutchinson says:
8 December 2012

Sirs, It is an obviously ill-conceived, hurriedly conceived plan as many of us will be paying more for our energy than we do at present as companies will raise their tariffs to the median. As a Whitehall civil servant, I’ve been involved with similarly hasty plans in the past and they have all failed.

Member
Marie says:
8 December 2012

£110 billion would go a long way to providing or subsidising self sufficient systems on homes.
This would generate jobs to replace those lost in the big energy companies.
It would reduce or even eliminate household fuel bills – lowering the cost of living.
It would eliminate big power cuts and their effects.
It would mean energy companies make less profit.
I can’t think of a downside!
We need politicians with integrity who are not controlled by big business so that they implement what people want and need and certainly pay for, over and over, in a so-called democracy.