Subsidising your own taxes doesn't sound like a good idea at all
We do, here, seem to have a proof that renewables are not cheaper. Which is a bit of a blow to so much of the current rhetoric on the subject:
British battery plants given cheap power to break dependence on China
Cheap power, eh?
The costs of the scheme will be borne by consumers, with the measure expected to add between £3 and £5 to household bills per year.
Ah, no, not cheap power then. Just power paid for by someone else.
So, how cheap paid for by someone else?
Paul Atherley, chairman of Tees Valley Lithium and Pensana, which are building plants in Teesside and Humberside respectively, said the changes will cut the price his companies pay for energy from a quarterly average of 19 pence per kilowatt hour (kWh) to “single digits” in September.
So, call that halving the cost to the user. Well, how is this to be done?
The BIS is comprised of 3 measures which will together address the areas of the domestic energy system which currently contribute to higher electricity costs for EIIs than comparable countries. The 3 measures are as follows:
an increase in the subsidy under the existing EII Renewable Levy Exemption scheme from 85% to 100% aid intensity
a new full exemption from the indirect costs associated with the GB Capacity Market
a proposed compensation scheme for the charges paid for using the GB electricity grid through the EII Network Charging Compensation (NCC) Scheme
At which point we can all observe the deliciousness of the policy. Electricity prices have been pushed so high by government intervention that we have to give industry a subsidy from those high costs. Should’a gone fracking instead, obviously.
There is also the logical problem here. Emissions are emissions, the CO2 does the same damage whether it’s one tonne of many millions from a factory or one tonne of three or four from a household. But the value of being able the make the emissions is clearly much, much, higher for those domestic ones than some factory producing a few hundred jobs (the Tyne lithium plant claims it will produce 500 jobs). Therefore any system of emissions reduction should be concentrating upon those from the millions from industry, not the handful from households.
We might also note that there’s absolutely no reason at all why Britain should refine or separate its own rare earths or lithium. There’s this thing called trade that can deal with that for us.
But the real lesson here? Renewables cost twice as much as not having to carry the costs of renewables. Because, as this announcement explains, if electricity users do not have to pay the costs of renewables - which is what the subsidy is, that they do not have to carry those costs - then electricity is half the price of having to pay those renewables costs.
Renewables aren’t cheap. So perhaps everyone could stop saying they are?
That folk can gain a subsidy of half price electricity if only they’ve not got to pay the renewables costs is all the proof we need of that contention.