Cost of levies should be published to ensure 'rational debate' on new low-carbon energy infrastructure in the UK, says Tim Yeo
Damian Carrington
guardian.co.uk, Monday 7 November 2011 17.28 GMT
The cost of green taxes should be included on home energy bills to ensure a "rational debate" on paying for new low-carbon energy infrastructure in the UK, according to the influential head of the commons energy and climate change select committee.
The Conservative MP Tim Yeo also told the Guardian the tensions within government over its ambition to be the greenest ever risks losing economic opportunities for the UK and blames "special pleading" by heavy energy users.
Green levies add £80 a year (6%) to the average gas and electricity bill of £1,335, according to the regulator Ofgem's latest figures. Most of this money supports schemes to increase energy efficiency and decrease fuel poverty, with about £20 supporting the development of renewable energy, including windfarms and solar panels.
"The danger is that the levies are now hidden," Yeo said. "The cost of the levies should be published on a regular basis. We need to be honest with the public that we need to keep the lights on and in a low carbon way, and the consequence of that is higher bills. Then there can be a rational debate over which renewables are most cost-effective."
A stream of front-page newspaper reports, some now retracted after Press Complaints Commission complaints, have exaggerated current green and social levies on energy bills, claiming they were adding £200 or even £300 a year. Other stories have claimed future levies could add £1,000 a year: government figures predict a £135 increase by 2020, but with bills overall just £13 higher than if no policies to reduce carbon emissions had been implemented, owing to rising fossil fuel costs.
"There have been some wildly inaccurate claims about the cost on bills of policies to cut energy waste and secure a clean power supply," said Andy Atkins, executive director of Friends of the Earth. "In reality, the cost is a fraction of our current energy bills and without them prices will skyrocket in the future – it's our addiction to expensive fossil fuels that's really ramping up bills."
At present, just one of the big six energy companies that supply 99% of the UK's energy – Scottish Power – presents on its customers' energy bills a breakdown of costs showing the size of the levies. Another big six company, SSE, told the Guardian it is committed to doing so from next year.
Ofgem calculates that company profits are currently 9% of bills, 50% more than the green and social levies. A spokesman for the regulator said: "Consumers do find their bills confusing. We are in favour of increasing the clarity in what makes up people's bills, and we will be consulting on this later this month." Both Decc and the consumer group Which? also backed the publishing of green levy levels, as part of a wider increase in bill transparency.
Christine McGourty, director at Energy UK which represents the UK energy industry, said: "It's important that consumers understand what they are paying for in their bills and various initiatives are underway to help explain this more clearly."
The government has committed to make it easier for customers to understand their bills and find cheaper tariffs and held a summit chaired byDavid Cameron last month. But the sole concrete outcome to date is a commitment from the big six to put a note on bills encouraging customers to call their supplier to see if they could be on a cheaper tariff. Yeo said: "The energy summit did not add up to a great deal."
Caroline Flint, shadow energy and climate change secretary, said: "It is time we did have transparency on bills with a breakdown of charges, including environmental costs. But we also need to open the books of the energy giants so that we can get at the real facts of what price they buy and sell energy at and stop people being ripped off."
Ofgem estimates the UK needs £200bn of investment in energy infrastructure by 2020. "The scale of investment needed is so enormous, greater than in any other business sector," said Yeo. "But in the UK there there is no god-given right for investment – it is an international business."
He warned that investors examine political signals as well as actual policy. The statement by chancellor George Osborne in October that "we're not going to save the planet by putting our country out of business" was a major blow to green investors, as has been Cameron's failure to speak out on the issue.
"Those businesses are bound to look very closely, even subliminally, at the signals," Yeo said. "It is a pity because there is the opportunity for the UK to be a leader and we should not give that up for a few heavy energy-using industries."
The steel, cement and other energy-intensive industries are widely expected to be given exemptions from carbon-cutting policies in the coming weeks. "They are past masters at special pleading these people," said Yeo. "We should not let those concerns become the driver of energy policy: they are a factor but not the main one."
Yeo also suggested an independent committee, and not ministers, should decide how to share out available subsidies between different low-carbon energy sources, in an analogous way to how the Monetary Policy Committee sets bank interest rates. "It would not be driven by short-term issues," he said, which would "avoid short term political changes of direction." On Monday, ministers cut the support for solar power by 50% with just six weeks notice. However, Yeo also criticised the solar industry as "subsidy junkies."
Tuesday, 8 November 2011
US airlines begin powering flights with biofuels
US airlines are attempting to demonstrate their clean energy credentials, scheduling flights partially powered by biofuels
Suzanne Goldenberg, US environment correspondent
guardian.co.uk, Tuesday 8 November 2011 02.38 GMT
Do not be alarmed if your aircraft begins to smell suspiciously like a fast-food restaurant – or pond scum for that matter.
US airlines were racing this week to demonstrate their clean energy credentials, scheduling a number of flights powered partially by biofuels.
First United Continental announced the departure on Monday morning of Flight 1403 from Houston for Chicago – or the 'Eco Skies test flight' as the airline called it – using a mix of 60% conventional jet fuel and 40% algae-based fuels.
Alaska Airlines then announced it would operate 75 flights using a mix of 80% conventional jet fuels and 20% biofuels starting on Wednesday. Instead of algae-base, the airline is using used cooking oil or fast-food restaurant throwaways, said Robert Ames, vice-president of Dynamic Fuels, which produced the fuel.
"We can use vegetable oil. We can use used cooking oil," he said. "A good mental reference is McDonald's used fryer grease."
The flights will include 11 between Seattle and Washington DC, and 64 between Seattle and Portland, Oregon, the airline said.
"We wanted to demonstrate the use of sustainable biofuels both on a transcontinental route and on a short haul that competes with ground vehicle traffic," Bobbie Egan, a spokeswoman for Alaska, said in an interview.
The airline calculates the use of the biofuels mix cuts greenhouse gas emissions on those particular flights by 10%.
It's not clear, however, when – or even if – Alaska will begin running regular flights on biofuels.
The cooking oil substitute cost six times as much as conventional jet fuel, said Egan. That makes a permanent switch prohibitively expensive – unless production increases and prices come down.
Dynamic Fuels, a joint-venture between Tyson Foods Inc, the world leader in chicken, beef and pork production, and Syntroleum Corporation, is the only producer of this type of fuel in the US. The plant has been operating just over a year, and has an annual capacity of 75m gallons.
Ames would not discuss current prices, but he said he was hopeful they would eventually come down.
"There is enough used cooking oil," he said. "Are we shutting down Saudi Arabia? The answer clearly is no. In America, we like our fast food but we really don't have those kinds of quantities available."
Monday's flights were not exactly historic. Virgin Atlantic first began trying out biofuels three years ago, and KLM tested a 50/50 blend of conventional fuel and used cooking oil on its Paris-Amsterdam route last June.
The US airforce, meanwhile, plans to test 40 of its aircraft on a biofuels blend by 2013.
But the flights could encourage the rest of the industry move towards cleaner fuels.
Following Monday's flight, Solazyme said on its Facebook page it hoped to sell as much as 20m gallons of biofuel a year beginning in 2014.
"Sustainable biofuels, produced on a large scale at an economically viable price, can one day play a meaningful role in powering everyone's trip on an airline," the chief operating officer of United, Pete McDonald, said in a statement.
Egan said meanwhile she hoped Alaska's move would encourage other biofuels suppliers to get into the market, bringing costs down.
The test flights are also a sharp contrast to threats of a trade war by the US aviation industry to moves by European airports to charge carriers for greenhouse gas emissions.
Suzanne Goldenberg, US environment correspondent
guardian.co.uk, Tuesday 8 November 2011 02.38 GMT
Do not be alarmed if your aircraft begins to smell suspiciously like a fast-food restaurant – or pond scum for that matter.
US airlines were racing this week to demonstrate their clean energy credentials, scheduling a number of flights powered partially by biofuels.
First United Continental announced the departure on Monday morning of Flight 1403 from Houston for Chicago – or the 'Eco Skies test flight' as the airline called it – using a mix of 60% conventional jet fuel and 40% algae-based fuels.
Alaska Airlines then announced it would operate 75 flights using a mix of 80% conventional jet fuels and 20% biofuels starting on Wednesday. Instead of algae-base, the airline is using used cooking oil or fast-food restaurant throwaways, said Robert Ames, vice-president of Dynamic Fuels, which produced the fuel.
"We can use vegetable oil. We can use used cooking oil," he said. "A good mental reference is McDonald's used fryer grease."
The flights will include 11 between Seattle and Washington DC, and 64 between Seattle and Portland, Oregon, the airline said.
"We wanted to demonstrate the use of sustainable biofuels both on a transcontinental route and on a short haul that competes with ground vehicle traffic," Bobbie Egan, a spokeswoman for Alaska, said in an interview.
The airline calculates the use of the biofuels mix cuts greenhouse gas emissions on those particular flights by 10%.
It's not clear, however, when – or even if – Alaska will begin running regular flights on biofuels.
The cooking oil substitute cost six times as much as conventional jet fuel, said Egan. That makes a permanent switch prohibitively expensive – unless production increases and prices come down.
Dynamic Fuels, a joint-venture between Tyson Foods Inc, the world leader in chicken, beef and pork production, and Syntroleum Corporation, is the only producer of this type of fuel in the US. The plant has been operating just over a year, and has an annual capacity of 75m gallons.
Ames would not discuss current prices, but he said he was hopeful they would eventually come down.
"There is enough used cooking oil," he said. "Are we shutting down Saudi Arabia? The answer clearly is no. In America, we like our fast food but we really don't have those kinds of quantities available."
Monday's flights were not exactly historic. Virgin Atlantic first began trying out biofuels three years ago, and KLM tested a 50/50 blend of conventional fuel and used cooking oil on its Paris-Amsterdam route last June.
The US airforce, meanwhile, plans to test 40 of its aircraft on a biofuels blend by 2013.
But the flights could encourage the rest of the industry move towards cleaner fuels.
Following Monday's flight, Solazyme said on its Facebook page it hoped to sell as much as 20m gallons of biofuel a year beginning in 2014.
"Sustainable biofuels, produced on a large scale at an economically viable price, can one day play a meaningful role in powering everyone's trip on an airline," the chief operating officer of United, Pete McDonald, said in a statement.
Egan said meanwhile she hoped Alaska's move would encourage other biofuels suppliers to get into the market, bringing costs down.
The test flights are also a sharp contrast to threats of a trade war by the US aviation industry to moves by European airports to charge carriers for greenhouse gas emissions.
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