GMB, the energy workers' union, has today called for
subsidies on renewable energy to paid for through general
taxation alongside an investigation into a bonkers wind power
‘rip off racket’ centred in Scotland.
It follows revelations that since 2010, energy bill
payers have paid £328m to wind farm owners for not generating any
energy - most of them in Scotland [1].
Meanwhile the Office for Budgetary Responsibility
(OBR) predicts that the surcharge the UK's 27m households already
pay is set to as much as treble over the next 4 to 5 years to £10
per week.
The average wind farm receives roughly half of its
income from the electricity wholesale price and half from subsidy
via the Renewables Obligation Certificate (ROC) – the cost of
which is passed on to consumers through their energy
bills.
When the energy grid reaches capacity, National Grid
stops wind farms from generating, in order to prevent damage to
the overhead wires and potential major system
disruption.
When this happens, the wind farm owners retain their
wholesale income – but lose their ROC payments subsidy, which are
issued only for the electricity that is actually sold to
consumers. [2].
The wind farm owners then
request government compensation for their lost ROC's revenue
through a wonderfully vague “constraint payment” – and many will
ask for more compensation than they are losing in
income.
Work by John Constable, of the Renewable Energy
Foundation, has discovered that the average compensation being
paid was nearly four times the amount of the lost
income.
One wind farm, Crystal Rig, was asking for (and
receiving) £991 per mega watt hour of electricity in compensation
when it was losing about £50 per mega watt hour
[3].
Environmental levies on consumer bills are set to
treble from £4.6 billion to £13.5 billion between 2015/16 and
2021/2 according to the Office for Budget Responsibility
[4].
Justin Bowden, GMB National Secretary for
Energy said:
“With the green subsidies on everyone's bills set to
treble within 5 years to £10 per week, GMB is calling for this to
be paid for through general taxation along with an urgent
investigation into the wind power rip off racket that is lining
the pockets of big companies at the expense of every single
energy bill payer and household in the country.
"Electricity is a natural monopoly and in this case
the public are being milked by paying twice over - through
spiralling consumer energy bills and taxpayer hand
outs.
"Every single one of the 27 million households in
Britain has already had to fork out to wind farmers for not
producing any electricity, and that may be just the tip of the
iceberg.
"By any measure this is a bonkers wind power rip off
racket which damages the case for renewables and leaves
government with some explaining to do.
"The renewable obligation certificate system rewards
and punishes the wrong people and appears unfit for
purpose.
"Where energy subsidies of any sort can be shown to
be justified and in the public interest, then GMB says they
should be be paid for out of basic taxation - a much fairer and
more progressive way."
ENDS
NOTES TO EDITORS
[1] ‘Wind farms that lie idle and get millions’ (Times, 13 August
2017) https://www.thetimes.co.uk/article/wind-farms-that-lie-idle-and-get-millions-5kfgm8bd8
[2] The 750 wind farms in Scotland - with a combined total of
3,000 wind turbines – have a total generation capacity of 5.7
GW.
[3] The Scottish wind-power racket (Capx, 10 August 2017) John
Constable and Matt Ridley https://capx.co/the-scottish-wind-power-racket/
[4] Economic and Fiscal Outlook Office for Budget Responsibility
(OBR), page 104, Environmental Levies, March 2017 http://cdn.budgetresponsibility.org.uk/March2017EFO-231.pdf
