Factchecking the Energy Bill second reading

18 January 2016 | Phoebe Arnold

Full Fact will be factchecking claims related to the Energy Bill as it passes through Parliament, thanks to a reader who started an independent crowdfunding campaign.

As the Bill enters the Commons, we’ve summarised our factchecks so far on topics including the Conservative manifesto’s pledge on onshore wind, the Renewables Obligation, energy targets, the cost to consumers, and jobs in the energy industry.

Please send factcheck suggestions to team@fullfact.org.

The Conservative manifesto’s onshore wind pledge

Claim: The Conservative election manifesto gave no indication that the party would stop new onshore wind generators from accessing an existing subsidy.

Conclusion: The manifesto referenced ending “new public subsidy” for onshore wind, but the exact meaning of this is ambiguous. It doesn’t, on the face of it, say that existing schemes would be closed early, but has to be seen in the context of the clear aim to stop the construction of new wind farms.

It’s reasonable to read it as promising the closure, but that wasn’t the only possible understanding at the time. The exact language used is loose, and on a literal reading the claimant we checked has a point. Read more.

Renewables Obligation

 The Renewables Obligation began in 2002 and requires electricity suppliers to take a certain proportion of the electricity they supply from renewable sources. The Government proposed an early closure of the Renewables Obligation to new onshore wind and the House of Lords passed an amendment removing this from the Energy Bill in October 2015.

The Energy Bill and the Salisbury Convention

Claim: The House of Lords is obliged to pass the Energy Bill, including the early Renewables Obligation closure, under the Salisbury Convention.

Conclusion:  The Salisbury Convention doesn’t affect the Lords’ formal powers. It’s a political understanding that the House of Lords won’t block bills that follow manifesto commitments. What ultimately matters is the attitude of the current House of Lords, and whether or not it feels that the early Renewables Obligation closure was contained in the Conservative manifesto. Read more.

The proposed Renewables Obligation: how much onshore wind capacity loses out?

Claim: Funding could be given to a further 7.1 gigawatts of onshore wind projects if the grace period for the proposed early closure of the Renewables Obligation is extended to projects with planning applications in place.

Conclusion: Gigawatts are used to measure energy generation capacity. Only 0.2 of the 7.1 gigawatts would be expected to qualify for the funding in the government’s best estimate. Making more generous assumptions, 2.5 gigawatts could qualify. Read more.

Would early closure of the Renewables Obligation to onshore wind cost £100 million?

Claim: The government’s impact assessment showed that we would be £100 million worse off because of the early closure of the Renewables Obligation.

Conclusion: The government’s best estimate is that the net present value of the early closure is worth about £160 million to the economy. The estimate that we would be £100 million worse off comes from making different assumptions about how the UK would generate electricity.

In particular, the government thinks that the net present value would be negative if onshore wind generation were not replaced by Combined Cycle Gas Turbine generators, which are relatively cheap and quick to build. Read more.

What effect on the public purse would closing the Renewables Obligation early have?

Claim: The saving to the public purse from closing the Renewables Obligation to onshore wind a year early is up to £270 million a year.

Conclusion: The government won’t improve its finances by closing the Renewables Obligation early, as the scheme is paid for by energysuppliers and their consumers. £270 million is the government’s upper estimate of how much the closure could save them. Its best estimate is a £20 million saving. Read more.

How much will closing the Renewables Obligation early save on your bills?

Claim: Closing the Renewables Obligation to onshore wind early will save households 30p a year.

Conclusion: The government’s best estimate is that the early closure will cut the average household’s electricity bill by 30p, but there’s some uncertainty to this estimate. It depends how many onshore wind projects lose out on subsidy because of the early closure of the Renewables Obligation. Read more.

Public opinion on wind farms

Claim: 69% of the public support onshore wind, which is the most popular renewable energy technology.

Conclusion: This is based on a 2013 survey where 70% of respondents stated they’d be happy to have a wind farm built in their local area. However, a regular survey by the Department for Energy and Climate change survey showed that onshore wind was less popular than solar power, wave and tidal power and offshore wind, with 65% of respondents supporting it (as of March 2015). Read more.

Energy targets

The UK’s renewable energy target

Claim: The EU has set a 15% overall target for UK energy consumption from renewable sources in 2020.

Conclusion: The UK does have a 15% overall target set by the EU. Within this, the EU has set a 10% sub-target for renewables in transport energy consumption in 2020. The exact way in which the 15% target is met is up to the UK, so long as the 10% transport sub-target is met.

Separately, the EU has set itself the target of producing 20% of its energy from renewable sources by 2020. Read more.

Are we missing our targets on renewable energy?

Claim: The UK missed its interim renewable energy target.

Conclusion: This interim target was for 5.4% of the UK’s energy consumption to come from renewable sources over 2013 and 2014. Provisional calculations show we met the target. That doesn’t mean we’ll necessary achieve the final goal of 15% by 2020. Read more.

Energy costs

Is new nuclear energy cheaper than new wind power?

Claim: The guaranteed price of new nuclear energy is lower than other low-carbon technologies.

Conclusion: The guaranteed price of new nuclear power is expected to be cheaper than offshore wind but more expensive than onshore wind. Read more.

Jobs in the industry

How many jobs could be lost in onshore wind?

Claim: Closing the renewables obligation to onshore wind a year early could threaten 19,000 jobs supported by the industry.

Conclusion: There were about 11,000 people directly employed by onshore wind and 8,000 in ‘supply chain’ roles in 2013, according to government estimates. It’s uncertain how many people will see their employment threatened by the proposed closure of the renewables obligation. Read more.

How many jobs are supported by the UK’s oil and gas industry?

Claim 1: The UK oil and gas industry supports an estimated 375,000 jobs.

Claim 2: The oil and gas industry supports more than 400,000 jobs.

Conclusion: 375,000 is the latest estimate of the total employment supported by the industry according to the industry itself. Over 400,000 was an older estimate. These figures are uncertain, and don’t just include people directly employed by the industry. Read more.

Full Fact fights bad information

Bad information ruins lives. It promotes hate, damages people’s health, and hurts democracy. You deserve better.