What we can do now to make energy more affordable

Yes Kay, you are so right.
I also don’t see why, through my taxes and higher fuel bills [minimally offset by the winter fuel supplement], I have to subsidise my wealthy neighbour who, purely by good luck since his house faces the right way, has been able to cover his roof with ugly PV panels and can keep the heating turned up at no extra cost to himself. A more inefficient process for transferring money around the economy, with businesses skimming it at every stage, I could not imagine.

Hi all, thanks for joining in. I’m going to ask one of our energy experts to come in and deal with individual questions, but in the meantime if you want to see our first news and reaction to today’s energy summit we’ve just put the news on our website:

http://www.which.co.uk/news/2011/10/government-must-ensure-summit-not-just-a-talking-shop-268434/

100% agree with Kay ( rats she mentioned it before me ). That’s what 25% reduction on the average bill. The government can find money for foreign aid and another war yet they’re making the end user pay for the Green Tax. I’m sure if they looked hard enough and cut waste from things like the NHS and MOD. (£32 for a loaf of bread etc, a few billion in scrapping this and that) the government could fund it themselves.

And I wonder if they’ll come up with exercise equipment u can use to generate electricity, kills 2 birds with one stone.

I have been reading Ofgem’s factsheet, “Simpler energy tariffs”. It gets off to a good start with a simple graphic comparing the current complex situation with a graqphic of “Under the New Proposals”. The latter I believe reflects the Which? position of one standing charge plus one tariff. So far so good. However on the next page of the factsheet Ofgem then refers, in addtion to the Standard tariffs, to “More innovative tariffs” and sets out proposals for these. In other words, it will still be freeplay for the energy suppliers to dream up endless different alternative tariffs. I don’t think Ofgem is listening.

I agree with the concensus of comments so far about “green tax” on energy bills being wrong, but perhaps for different reasons.
We do need sustainable energy and to develop this there is a cost to be paid, but it is really everyones problem and the money should come from general taxation and not by placing a levy on our gas and electricity bills.
Here’s an example.
The little old lady living on a fixed pension which reduces in value by the day is paying through her energy bill some of the money which goes to line the pockets of those collecting the feed in tariff from their PV panels. They are getting a good return, she is have to decide between a warm house and lunch.

Very interesting Panorama programme recently in which it was argued the Government policy on energy might well be flawed.
In the race to reduce national Co2 levels an absolute fortune is being spent on offshore wind farms. This of course ends up having to be paid for by us the consumers and although wind power works it’s not cheap and not reliable.
The Panorama conclusion was that Co2 targets could be met by initially converting quickly from coal to cleaner gas (where we haven’t already) and by then more slowly bringing on nuclear and alternatives.
This it was argued would enable 2020 Co2 targets to be achieved without hitting consumer energy bills anything like as hard as the current approach.
Might be worth “Which” finding out more about this?
It could well help shape future “Which” campaigns?
Better I’d suggest than all the hot air about switching, tariffs and “competition” (or the lack of) none of these will make anything like as significant a difference as Government getting policy right.

The government could reduce the cost of gas and electricity at a stroke by reducing VAT to zero. EU directives prevent them from being exempt from VAT. One of the “advantages” of being a member of the EU! A further reduction of two to three hundred pounds in gas and electricity domestic charges per year could be achieved by cancelling all the present uneconomic green carbon agenda and subsiding wind power, but this would again be contrary to another “advantage” of being a member of the EU.

Sorry for the delay in responding to a number of the comments on this Conversation about what is driving energy price rises. A number of you have commented about the impact of green taxes on our energy bills and asked for Which?’s position on this issue and I thought it might be useful to give you a brief summary of our views.

Which? wants a market that provides energy for consumers at a fair price now and in the future. At the moment, the energy market does not serve the consumer well and that has to change. Furthermore, significant investment is needed to renew our energy system. While Which? is not an environmental charity, we recognise that our energy system does need to be sustainable. Fossil fuels will not last forever and burning them to produce electricity has negative impacts on the environment, including contributing to climate change.

Nevertheless, the investment needed in our energy system must be made in the most cost effective way possible. Consumers cannot be expected to write a blank cheque – and it was for this reason that Which? supported the Government’s decision to cut the Feed in Tariff (though we have concerns over the particular process and timings of the cut).

Furthermore, with levies supporting the Government’s environmental and social agenda also adding costs to our bills, we need much more transparency about how much these programmes add to our bills and how this money is spent by energy companies. At present energy efficiency measures make up around 10% of our electricity bills and 3% of our gas bills and with changes to these initiatives in the next year much greater scrutiny is needed.

Finally, it is important to recognise that gas is an important source of flexible power in the UK and is likely to remain so for many years to come. It produces around half the green house emissions of coal. However, the wholesale price of gas – not green energy and energy efficiency levies – has been the single biggest driver of the recent cost increases in energy bills. Gas is such a key driver of energy bills is because it comprises about 50% of all generation in the UK and sets the price of electricity. Global demand for gas is increasing and we are now a net importer, so there are some benefits to reducing the level of our dependence gas.

As the Government considers the future of our energy generation through its White Paper on Electricity Market Reform, we will continue to scrutinise these issues to ensure that consumers are not penalised in the future. We will therefore continue to listen to comments like those posted in this conversation and seek to address them in our ongoing policy work on this important issue.