THIS SPRING’S swingeing energy price rises will see households in Ceredigion, one of the poorest places in Europe, asked to fork out a potentially crippling £863 extra a year, well above the UK average rise of £598.
As energy regulator Ofgem raises the price cap, the county will be the worst hit in Wales and second hardest throughout the UK. Gwynedd, Powys and Carmarthenshire will be in the UK top six for biggest expected rises, at fourth, fifth and sixth respectively.
But relax; this distinction comes with a huge and satisfying compensation. For you have to remember that. every time you turn on a light or boil an egg, you will be contributing handsomely, albeit without any choice, to that most deserving of charities – The Distressed Moneybags Aid Association (DMAA).
It’s this wonderfully benevolent organisation that, through your generosity as energy consumers, distributes the green levies that do in fact rather weigh down your household energy bills.
Beneficiaries include overseas-based energy companies with windfarms in Wales, wealthy landowners, pension funds and rich individuals.
Examples include Falck Renewables, a Danish conglomerate offshoot, which has done very nicely out of green consumer-financed subsidies since its 39-turbine windfarm at Cefn Croes in north Ceredigion opened in 2005. Unless things now change, the poorest rural Wales households will also find themselves helping – through the ‘environmental and social costs’ (the green levies) element of their bills – to finance Swedish company Vattenfall, which has recently opened Wales’s biggest onshore windfarm at Pen y Cymoedd in south Wales. In this case, the struggling of Ceredigion will be putting their hands in their pockets to help out a multinational power company owned by…the Swedish state.
And, as we peruse the long list of those given that little bit extra by the DMAA, don’t let’s forget ex-prime minister David Cameron, who put up a wind-turbine in his back garden in the Cotswolds – and duly got his whack.
For the poorest of rural Wales and elsewhere, this can’t go on. With the least delay, a way must be found to exempt from green charges those already struggling to pay for non-negotiable essentials – like food for their children, like adequate heating for their homes.
Between about 29 and 41 per cent of our electricity and gas bills pays for the energy itself. The rest covers the cost of delivering it to consumers (between about 24 and 29pc), operating costs of the energy company (roughly, between 20 and 26pc), VAT at five pc and…the ‘green’ levies. These are between 25.5 and 27pc for electricity, and two per cent for gas, and it is these that the financially stressed must now be relieved of.
The picture for everyone is bad enough. According to Ofgem, the energy regulator, households are currently paying an average of £1,277 for their gas and electricity, with that figure set to rise to about £2,000 from this April as increases in wholesale gas and electricity prices feed through into domestic bills and the price cap is raised.
Of this, 15.3 per cent — £195 a year before this spring’s increase — goes on subsidies. On electricity bills alone, the‘environmental and social costs’ element can be as high as 27 per cent. This last is especially a burden in rural Wales, where many homes are off-grid for gas, being fundamentally all-electric, supplemented by wood-power and bottled gas.
The environmental levies cover a perplexing number of schemes, some of which are simply money-making devices for landowners, companies, pension funds and wealthy individuals.
There is the Renewables Obligation (RO), under which consumers subsidise renewable energy at a cost of £6.3 billion a year, paid by both domestic consumers and business users of electricity. Sometimes, this scheme fails spectacularly, and at a particular cost to hard-up households. In 2020, for instance, wind and solar farms generated so much electricity on windy and sunny days that they had to be paid £282 million in ‘constraint payments’ to turn off their supplies.
The bill again falls on consumers – our rural poor must once more be of prime concern – under a newish green initiative, Contracts for Difference, which offers a guaranteed price for electricity generated. At the most recent auction for applicants last September, the UK government offered £265 million of subsidies. Good news for landowners and renewables developers, another downer for Ceredigion householders eking out an existence on the minimum wage and trips to food-banks.
Since the early 1990s, companies with windfarms in Wales have made billions from the sale of electricity, massively enhanced by the subsidies paid by ordinary households, with the only, and very slight, longer-term advantage for local communities having been rather patronising ‘community fund’ sweeteners of a few hundred thousands. At the same time, landowners in Wales have not been slow to cash in on this bonanza.
All are eager beneficiaries of the Distressed Moneybags’ Aid Association, to which many of us may wish to no longer, caps doffed, so obediently contribute.
Since the early 1990s, companies with windfarms in Wales have made billions from the sale of electricity, massively enhanced by the subsidies paid by ordinary households, with the only, and very slight, longer-term advantage for local communities having been rather patronising ‘community fund’ sweeteners of a few hundred thousands. At the same time, landowners in Wales have not been slow to cash in on this bonanza.
All are eager beneficiaries of the DMAA, to which many of us may wish to no longer, caps doffed, so obediently contribute.
10 February 2022
Bronterre News 