British price rises reveal premium aspect of renewables

by William Yeatman on October 26, 2004

Environmentally-conscious electricity consumers in the United Kingdom have been surprised to see their bills going up by 10 percent as a result of rising oil and gas prices.  The price rises have been condemned as profiteering by the opposition Conservative Party (a believer in global warming alarmism).  Energy spokesman Laurence Roberston told the Times (Oct. 17), It is unbelievable.  It sounds a bit of a con to me.


Green Energy, which raised its prices by an average of 9 percent, said, The demand for renewables has increased over the last three years in no small part as a result in the increase in the voluntary market.  This increase in demand has meant that renewables command a premiumand consequently when the price of brown (non-renewable) energy goes up, renewables move to maintain that premium.


The chief executive of Good Energy also defended a price rise of 7-10 percent by saying, If I kept my prices down and I told my generators to keep their prices down, we would get a lot of customers and then I would run short.


Norman Baker, of the alarmist Liberal Democrat party, commented on learning that economic laws apply to renewable energy as well, It is deeply ironic that people like me who are supporting green energy have found it tied to oil.


Meanwhile, the British governments quango (which stands for quasi-autonomous non-governmental organization) the Energy Saving Trust told British householders to cut down on heat and power and walk to the shops instead of driving (BBC, Oct. 25).  This years winter is projected to be particularly cold in Britain (see last issue).

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