Consultus Energy Outlook - February 2020

Your one stop guide to what is affecting the energy markets.

Government considering shifting energy policy costs onto taxpayers

 

On 7 February, the BBC reported the government is looking to shift clean energy costs to taxpayers rather than energy consumers, as part of the UK’s net zero transition.

Up to £10bn per annum is presently invested in the growth of clean technology, where consumers pay approximately £5.5bn.

A government spokesperson told the BBC: “We are definitely considering the way that costs are distributed. The Treasury is looking at the costs of transition to net zero emissions by 2050.

They continued: “This will include how costs may be distributed across different groups to create a fair balance of contributions.”

Speaking with the BBC, Centrica Chief Executive, Iain Conn called on the government to “move the funding to income tax, which would mean a typical low income worker would save £100 a year,” or for government to means-test households, adding that moving costs from bill payers to tax payers would create minimal disruption to overall annual costs. Whilst the BBC said that Conn was to be meeting Chancellor of the Exchequer Sajid Javid (prior to his resignation on 13 February) to discuss his proposal, it has been informed the idea is underway as part of the Treasury’s review of current energy policy

Additionally, the government is consulting on a proposal to bring forward the ban on coal power from 2025 to 2024, Prime Minister Boris Johnson announced during his COP26 UN climate conference launch speech. In the 4 February announcement, the government said new statistics show the UK’s greenhouse gas emissions fell by 2.1% between 2017 and 2018, “thanks in large part to the rapid decline of coal-powered electricity generation”…read more

 

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