Know one thing, if you let the green taliban have any say in anything it will cost you much, much more in the long run. Their solutions for everything require huge subsidies, reductions in service and/or both, and certainly increased costs for everyone.
Electricity prices in Britain may be almost double those in Germany within three years due largely to the impact of a new tax aimed at supporting renewable power generation, a report by bank Credit Suisse has claimed.
The bank’s analysis showed wholesale prices, which form the backbone of energy bills, would top those in Germany by 85pc in 2016-17 and would be higher in general for the next seven to 10 years.
The bank blamed the roughly fivefold rise in the government’s new tax on carbon-dioxide emitting power generation over the next seven years, while also pointing to Britain’s lack of infrastructure to import power from the European mainland.
Prices in the two countries had tracked one another for years, but they diverged last year as Germany spurred a boom in renewable energy generation by pouring billions into subsidising the green sector.Â
The Credit-Suisse figures show that in the winter of 2016/17 UK power prices will trade at an 85pc premium to German equivalents, compared with a 25pc divergence currently.
“Our analysis suggests these differentials will continue for the next seven to 10 years,” analysts at the Swiss bank said in a report to clients.
The Government introduced the mandatory tax on carbon emissions at Â£4.94 per tonne of CO2 earlier this year, adding to the carbon charges already in place under the European Union’s Emissions Trading System (EU ETS).
The two costs calculated together will rise to Â£30 per tonne in 2020, an expense which will significantly increase British power prices, Reuters reported.
German power prices have fallen on the back of the boom in solar and wind power but the government has now moved to rein in subsidies in recognition that the expansion may have come too fast given concerns over profitability and problems with managing the flow of green energy.
Seeking to learn from that, the UK model is to cap the value of subsidies annually in the hope that taxing carbon heavily will encourage the market to invest more in the renewable sector.
But Credit Suisse said the net effect over the next decade would be to cap the growth of renewable capacity.