Climate policies blamed for rising UK electricity prices

Posted: April 3, 2018 by oldbrew in climate, Critique, government
Tags: , , ,

Nothing new there perhaps but, like the boiling frog, the reality of an endless upward ratchet of climate charges on bills may still not have fully sunk in with some of the public yet.

Any doubt that increases in UK electricity prices are the result of energy and climate policies, rather than underlying wholesale energy costs, is firmly set aside by the recent announcement from Opus Energy that it must increase its prices to consumers by 7.5% even to those on Fixed Term contracts because of sharply rising “pass through” costs, namely subsidies to renewables, grid management, and the Capacity Market.

Opus Energy, part of the Drax Group and winner of the British Small Business award for Energy Provider of the Year (2017), has written to customers in the last week announcing a 7.5% increase in electricity supply charges.

A copy of this letter has been shown to me by one such customer, together with a copy of a similar letter sent in March 2017 announcing an increase of 2.9%, a combined increase of just under 11% in the space of year.

Since these substantial increases apply even to those on “fixed term” contracts, Opus has had to explain its reasons, and in doing so it has usefully provided clear evidence that it is government energy and climate policies that are to blame, not underlying energy costs.

In its most recent letter, of 27 March 2018, Opus explains that its charges “reflect the cost of your energy, which we fixed at the beginning of your contract, and non-energy costs, which are variable and outside of our control.”

The customer who wrote to me about this matter admits, ruefully, that he failed to understand the contract properly, and imagined that he had a fixed price deal, when in fact the contract clearly shows that only one element, that flowing from the wholesale price, was fixed.

In what used to be normal circumstances, his mistake would not have mattered much or at all, since until relatively recently it was rises in the conventional energy cost that a consumer might reasonably fear. The current situation is very different, and wholesale costs are of declining importance in the rising retail price. In this new world, all customers should be asking salespeople for black and white clarity as well as checking the wording of any “fixed” contract in order to ensure that it really is attractive as it appears to be. The threat now is from policy costs.

Perhaps realising that their customers will be surprised by the announcement, Opus goes on to put the blame firmly on government. “Non-energy costs”, they write “cover the cost of transporting your energy to you and provide support for Government initiatives and interventions in the energy industry, such as climate change policies”.

Continued here.
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  1. Phoenix44 says:

    Never ceases to amaze me how much government loves to make businesses show how their prices are made up yet does all it can to hide the costs it imposes on consumers.

    Instead of the pointless Gender Gap pay audits, companies should start producing Regulation and Subsidy audits, showing customers exactly how much government intervention costs them.

  2. oldbrew says:

    The UK govt threatens a cap on power prices when they are the main cause of the increases :/

  3. Graeme No.3 says:

    Standard method of implying that the increases power prices are due to ‘evil, money grubbing companies’ rather than well intentioned (if incompetent) public policy.

  4. TomO says:

    well intentioned (if incompetent) public policy

    I do believe that in this case the correct comparison is that an incompetent burglar is still a burglar.

    Then there’s the levies that the big energy companies have been warned not to disclose to customers…. – or else what? – I’m thinking that if the energy majors want to claw back a shred of dignity they should expose how much is being stolen.

  5. Bitter@twisted says:

    I sure this will be reported by the BBC.

  6. E.M.Smith says:


    As I understand it, UK electricity prices are higher than USA prices. I’m paying 19 ¢ / kW-hr for baseline electricity but usually over run that amount (by about a double…) to the 32 ¢ / kW-hr tariff. I have an all electric kitchen. Other major power users are my washer (gas water heater, gas home heat but with electric blower motor) and heater motor.

    So my major way to cut use is the electric stove.

    Well I just completed a set of tests on power needed to boil 1 cup of water. Turns out that buying “Denatured Alcohol Fuel” even in small units like quarts (from Walmart – $2.25 ) and using it in a Trangia “spirit burner” stove (about $20 to $30 depending on exact choices) is cheaper than my top rate and a rough match to the baseline rate (perhaps a bit cheaper).

    I did actual “make a cup” tests, so it included the things a theoretical analysis ignores. Like all the heat that goes into heating up the electric element and how efficiently each stove couples to the pot.

    Now in general, being as grandad was a working smith, I’m fond of “playing with fire”… so I have great fun with the larger Trangia camp stove. It just sits on my kitchen counter just fine. Heats a pot of 8 oz of water from the cold tap to the boil in about 5 minutes. Just enough time to get the cup ready, fill the tea ball, etc. etc.

    As I do this 1/2 dozen times a day, that’s about $0.20 / day removed from my electric bill (if my figuring is right). Call it $6 / month. Not a big amount, but if enough people did it, it would send a message.

    Yesterday, as the stove was already lit and running, I cooked breakfast on it too. Sausage & eggs. Worked nicely, but I’d need a bigger stove for more than one person (or we’d need to eat in shifts…) Then I put on a pot of 1/2 dozen eggs to make hard boiled eggs for salads and sandwiches. Only then did I shut it down. It was remarkably easy and convenient (no need to keep rotating to face the counter then the electric stove then…)

    Now IF the UK prices for electricity and fuel from the hardware stove are in a similar relationship…

    FWIW, a “Coleman Unleaded Gasoline Camp Stove” is even cheaper per use. More fuss though. The spirit burner is just trivial to use. Pour in fuel. Light it. When done, put the ‘snuffer cap’ over it. That’s it. But that’s at $9 / gallon of methanol ‘by the quart’. Motor Racing methanol is much cheaper. IIRC it was about $4 / gallon a few years ago. Yet unleaded gasoline runs $3 / gallon here.

    The point? ALL of them are cheaper than my electric rates. Is that true in the UK? And if so, why don’t folks just break out the camp stove?

  7. tom0mason says:

    Yep we need to subsidize these wasteful methods of generating electricity because we all need to “save the planet.” from all this ‘Global Warming’ (climate change?)

    I note that Saudi Arabia got some more snow…
    I welcome them to a global warming ‘hole’.

  8. oldbrew says:


    The Climate Change Act is the root cause of this shambles.