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Factchecking the Energy Bill

11th Mar 2016 | Laura O'Brien

Full Fact has been 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 its third reading in the Commons, we’ve summarised our factchecks so far.

Household bills and the Renewables Obligation

Both proponents and opponents of the bill have put specific numbers on what it will do for consumer bills. Broadly speaking none of these numbers is a useful summary of what we know about the possible effects of the bill.

Claim: The early closure of the Renewables Obligation to onshore wind will save households 30p a year on average.

  • This should be treated with caution as a summary of the effects of the bill.
  • It’s from the government’s impact assessment, but there’s some uncertainty to this.
  • The same assessment said savings could range from nothing to up to £3.40 per household. It depends on how many onshore wind projects lose out on subsidy because of the early closure.
  • There’s no easy way to interrogate the figures. They don’t consider the indirect impacts such as the impact on investor confidence, which MPs and consultants at EY have said has been damaged by the government’s wider package of reforms (see below).
  • More research on the impact of the government’s overall renewables policy programme on consumer bills would be needed to make confident predictions.

Claim: The UK is becoming less attractive as a place to invest in renewables, falling down the international league table because of the government’s policies.

  • That’s according to a report by consultants at EY, who said recent cuts had damaged investor confidence.
  • The UK was 11th out of 40 countries in the latest of the company’s regular rankings, down from 4th two years earlier.
  • That’s backed up by evidence heard by the Energy and Climate Change Committee, which found that government announcements on renewables had damaged investor confidence.

Claim: Changes in government energy policy since 2015, including measures contained in the Energy Bill, may have added £120 a year to household bills.

  • The Energy and Climate Change Committee’s report said consumer bills could rise as a result of the policies, but didn’t put a figure on this.
  • The specific figure of £120, reported in the Guardian, isn’t particularly credible.
  • One company told the Committee that there could be an estimated £3.14 billion in extra investment costs as a result of investor uncertainty. It said this was “a somewhat simplistic analysis based on arguably anecdotal evidence from one investor exploring an overseas market.”
  • The £120 figure divides the £3.14 billion estimate between the UK’s households, rather than all users (including industry).

The impact of the early closure of the Renewables Obligation to onshore wind

Claim: We’ll be £100 million worse off because of the early closure of the Renewables Obligation.

  • It’s not possible to be sure. This is one estimate of the closure’s ‘net present value’ that’s made in the government’s impact assessment.
  • The government’s best estimate is that the net present value of the early closure is worth about £160 million to the economy, based on different assumptions about how the UK would generate electricity.
  • 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. 

Claim: Early closure of the Renewables Obligation will disproportionately affect Scotland.

  • The government estimates 60% of the subsidy due to be paid this year to onshore wind farms under the RO will go to Scotland.
  • Scotland has about the same percentage of the onshore wind capacity that is currently installed.

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

  • 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 of these people will see their employment threatened by the proposed closure. 
  • Jobs associated with wind farms that are already up and running under the Renewables Obligation are unlikely to be affected, but jobs associated with the construction of new projects could be threatened.

Renewables and emissions – recent trends

Claim: The UK is making progress towards meeting its 15% target on renewable energy.

  • It has met interim targets, but that doesn’t mean it will meet the target for 2020.
  • Without further action from the government it will be missed. That’s according to the government’s own internal forecasts.
  • The UK has an EU target to get 15% of its energy from renewable sources by then. 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.
  • So far the bulk of the progress has been made in electricity.

Claim: UK greenhouse gas emissions fell by 15% between 2010 and 2014, one of the biggest reductions in a single parliament.

  • That’s right.
  • 2014 alone saw a drop of 8.4%, the second highest annual drop measured (behind 8.9% in 2009).
  • A number of factors were behind the drop, including a reduction in the amount of energy being consumed.

Wind power

Claim: Wind generates about 10% of the UK’s power.

  • That's right—it generated 10% of the UK's electricity in 2014/15, although the amount varied within the year.
  • At times less than 1% of the UK’s power mix comes from wind.
  • Figures for the last year show wind turbines contributed a greater share of the UK’s power in winter.

Claim: In November low wind power meant National Grid had to put out a call for electricity which led to a spike in prices.

  • On 4 November National Grid told electricity generators it would need more power to meet demand, issuing a “Notification of Inadequate System Margin”.
  • This wasn’t solely due to wind or any individual generator—it was the result of a few factors.
  • Wind was low, but this had been predicted and alternative power sources arranged. The call for more electricity came after the unexpected failure of other plants.
  • Generators responded to the notification by increasing their output and selling it to the grid at a higher than usual price.
  • National Grid says the total cost of balancing supply and demand was £2.4 million that day, compared to an average of £2.33 million a day in the previous financial year.

We aim for our fact checks to be as accurate and up-to-date as possible. If you think we've made an error or missed some relevant information, please contact us.