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David Porter » Articles at Suite 101 » Energy Policy Needs New Ideas or It Could Burn the Government

Energy Policy Needs New Ideas or It Could Burn the Government

Crowd-sourcing may be worth a try as the Government tries to keep affordable heat and light on and transport moving in this coming winter. This article first published on Suite 101, 16 November 2011, and as another winter approaches, it is a s relevant as last year.

In the age of social media and mass voting on issues via phones, ballots and violent protest, harnessing the received wisdom of crowds could be just what the Government needs to get it off the energy policy hook.

November saw another Commons debate triggered by an epetition, whereby the public votes on hot topics for Parliament to consider. Many MPs voiced strong opposition to the planned January fuel duty hike, reporting businesses, retailing, hauliers and individual people finding rocketing fuel prices unaffordable. Gone are the days when motoring was a luxury; now it’s economically essential.

Motoring and Taxes

With price rises in the pipeline from delayed tax increases (because of earlier widespread public protest) driving costs can only rise. That is without factoring in the ever increasing price of extracting and processing oil in the first place. The Commons was told that not increasing fuel tax would stimulate the economy as a whole.

The political difficulty is that this particular increase of 3p per litre, would have netted the Exchequer £1.5 billion in a year. Government in a time of austerity, debt reduction strategies and fiscal uncertainty, cannot forgo that money.

They Conservatives resisted imposing a 3-line whip, unlike with the European referendum issue. The upshot was that no vote was taken; ministers ‘listened’ and ‘took note’. The fact is that the money has to come from somewhere, and few MPs addressed that. Most angry voters have also avoided grasping that particular nettle.

One commentator, Chris Fisher, (Eastern Daily Press, 16 Nov 2011), suggested that the question be ‘thrown out to the electorate’. Some of the 110,000 voters who went online about it must have ‘thought this through’.

Gas and Electricity

Petrol and diesel are not the only fuels of British life under price and tax pressures. Gas, electricity and oil to heat homes, hospitals, offices and factories are also increasing. Here, it’s not so much the tax component at issue as how utility companies charge consumers.

‘Fuel poverty’ is defined as households who ‘have to spend more than 10% of household income on fuel to keep their home in a ‘satisfactory’ condition’, according to the Poverty Site. It’s a measure which compares income with what fuel costs ‘should be’ rather than what they actually are.

Three determining factors are the cost of energy, energy efficiency (or not) of the property and household income. They believe at least 20% of British households, 7 million homes, are fuel poor. The Energy Collective who describe themselves as ‘the world’s best thinkers on energy and climate’ have come up with a plan to eliminate fuel poverty.

They believe thousands of lives could be saved by giving energy bill rebates to the fuel poor that ‘are conditional on having smart meters, advice, energy audits and eco-refits’. They quoted an October 2011 report by Professor John Hills of the London School of Economics, estimating 2700 people a year die because they can’t afford soaring heating bills. That’s more than are killed on the roads.

They thought Government policies to create a ‘low carbon future’ added 8% to average energy bills, and the only way forward is to help low-income households use less better. Existing easing schemes cost about £1.7 billion a year, but are insufficient.

Winter Fuel Payments for people over 60 years are being reduced this year, but are not in any case, targeted. Better data and analysis, matched across local authorities, charities and utility providers will help, Energy Collective argued. Massive investment in fuel poverty reduction (at least the same as bailing out the banking system) would create jobs and improve life for millions.

The cost of producing gas and electricity is set to rise relentlessly, as the world consumes and demands more. Energy Collective suggested using crowd-sourcing, the fuel poor themselves and giants like Tesco for solutions.

Wind and Nuclear Power

In October 2010, Wind Energy Planning reported Government strategy for wind energy harvesting, updated from the previous Labour government’s. Both governments were seeking a diversified energy base, particularly as alternatives to oil and gas.

Specific nuclear sites will be developed, the government being happy that ‘effective arrangements will exist to manage and dispose of waste produced by new UK nuclear power stations’. It made the commitment despite doubts after the 2011 Japanese earthquake and tsunami caused nuclear leaks.

Renewable energy from both onshore and offshore windfarms was given further support. While the concept has received some public acceptance and subsidy with people liking the idea that a turbine in motion can light streets, there are, nonetheless, campaigners opposed.

Wind Energy Planning quoted The Spalding Guardian that South Holland District Council won liability orders against Jane and Julian Davis as they‘d withheld Council Tax in protest at windfarms. The couple argued that wind turbine noise near their house had made it ‘uninhabitable’ and are claiming £2.5m compensation for ‘loss of amenity’.

There is also the fact that even in the UK, the wind doesn’t blow regularly enough to generate consistent, reliable electricity. Of course, it has to be part of an energy package with hydro-power, wave-power and the sun.

Solar Energy

After much hype and hope of individual households with south-facing roofs making fortunes from selling energy to the National Grid, the Government halved solar subsidies.

Rowena Mason reported in the Daily Telegraph that the CBI claimed the Government was scoring an ‘own goal’ by cutting costs on energy policy, ‘causing job losses and uncertainty’. The Government had already angered the oil industry by raising taxes on exploiting reserves and large businesses by changing the Carbon Reduction Commitment Scheme.

Solar subsidies are paid by a levy on gas and electricity bills, and some felt they simply added to energy costs for the majority. The fledgling solar industry is naturally outraged; several court cases against the Government are pending. Lobby group Friends of the Earth demanded a judicial review..

It confirms that the problem for government in framing comprehensive energy policies is that people are at once taxpayers and consumers; taxpayers and drivers; taxpayers and workers.

Many of those strands are incompatible. Time for crowd-sourcing to solve that conundrum?

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