The 'milestone in energy policy' -- or the millstone around our necks?
21 years ago, the then Labour UK government produced a white paper on green energy. It reveals that nothing has changed, and the political establishment will accept no test in reality.
Thanks to Josh for the cartoon depicting the previous post here. It applies to this post, too. Where is all the green money going? What for?
In a UK government white paper published 21 years ago this month, then Prime Minister Tony Blair wrote,
This white paper is a milestone in energy policy. It is based on the four pillars of the environment, energy reliability, affordable energy for the poorest, and competitive markets for our businesses, industries and households.
It is my general observation that all of Tony Blair’s projects now exist as rubble and corpses. But I don’t think he is finished yet. Many have observed that the ex-PM is an unflushable turd, who is endlessly bobbing up in public life, despite surrendering his mandate in the decade before last, his buoyancy aided by endless $millions that come from his servicing the interests of billionaires and dodgy regimes. But what we are interested in here is the the enduring influence of what his government committed the country to, epitomised by the 2003 whitepaper. How does it stand the test of time on its four pillars? They were:
the environment
energy reliability
affordable energy for the poorest
competitive markets for our businesses, industries and households
We can evaluate Blair’s 2003 commitment to ‘affordable energy for the poorest’ very simply, and without much work. In the era marked by the green energy policy milestone, energy prices nearly doubled in short order. Over the next decade they nearly doubled again. Data here is from the government.
In his opening remarks, Blair claimed to ‘renew our commitment that no household in Britain should be living in fuel poverty by 2016-18’. That renewed commitment was renewed once more two years later, in the Labour Party’s 2005 election manifesto, claiming that. ‘Our goal is to eliminate fuel poverty for vulnerable groups by 2010,and for all by 2015’. Here, the data is — or rather, was, as we shall see — very straightforward:
Between Blair’s 2003 energy white paper and the end of Labour’s administration, rates of energy poverty increased from 5.9 per cent to 16.9 per cent of households in England, peaking in 2009 at 18.4 per cent, or nearly four million households.
But let’s not single-out Labour for criticism. Over the next decade, energy or fuel poverty became an extremely embarrassing metric for the coalition and Conservative governments. Accordingly, the definition of the category changed. The metric that had shamed the Labour government was ‘a household is considered to be fuel poor if they were required to spend more than 10% of their income on fuel to maintain an adequate standard of warmth’. Following the Energy Act, a new metric of Low Income High Costs (LIHC) was introduced, under which households were counted as ‘fuel poor’ if they:
have required fuel costs that are above average (the national median level)
were they to spend that amount, they would be left with a residual income below the official poverty line.
LIHC has since been superseded by a new metric, called ‘Low Income Low Energy Efficiency (LILEE)’, under which households are considered ‘fuel poor’ if the two criteria are met:
i) Low energy efficiency. This includes all households with a Fuel Poverty Energy Efficiency Rating (FPEER) of band D or below
ii) Low income. This includes all households whose residual household income would be below the official poverty line if they were to spend their modelled energy costs
Needless to say, and despite a doubling (again) of domestic energy prices between 2010 and 2022, an increasingly complex definition of ‘fuel poverty’ allowed the government’s statisticians to claim that the percentage of households suffering it in England fell from 22.1 to 13.4.
However, the problem ought to be obvious. The LILEE metric excludes from the category of ‘fuel poor’ any household living in a property which has an EPC rating of C or greater. If you spend 10, 20, 30… 90 per cent of your income on energy, then it doesn’t matter — the government isn’t interested in you. It has lied your problem out of existence with the assistance of its lying statistical methodology. Anyhow, REJOICE!: see how the proportion of fuel poor households in England has fallen from 22.1 to 13.4 per cent in 12 years!
But I digress. This post was intended to be about the 2003 Energy White Paper, and now I have gone into a rabbit hole on energy poverty metrics! About which, of course, there is plenty more to say, which I shall make a note to do in future posts here. For now, it is sufficient to say that all parties of government are big fat liars. And the main point was to demonstrate the take home point, which is that governments put the green policy agenda above the interests of the public, including the poorest in society, despite their manifesto pledges that are manifestly in contradiction with the green agenda.
Blair claimed, back in 2003, that ‘our analysis suggests that, by working with others, the costs of action will be acceptable — and the costs of inaction are potentially much greater’. 21 years later, we have sufficient data to show that the costs are not acceptable, and that green energy policies are a far worse problem than climate change. Nonetheless, climate change dominates the policy agenda.
So let’s look at some of the other ‘pillars’…
Competitive markets for our businesses, industries and households
We have discussed households, of course. Here is the data on energy prices for businesses and industries, who were hoping that the Labour government and its successors would help to create ‘competitive markets’…
So much for competitive markets, then. It is a central claim of the green lobby that the policies it has lobbied for have successfully decoupled GDP growth from CO2 emissions. The above data would suggest that high prices have pushed de-industrialisation. If there has been any economic growth despite it, we might begin to wonder how it was produced, and how it may be sustained in the face of yet more green policy and its inevitable failures. But that, too, is for another time.
I was on NTD news this week, taking about points of this kind, in the wake of current Labour leader, Keir Starmer’s flip-flopping on his party’s commitment to spending (borrowing) £28 billion per year on the green agenda. Starmer seems to have finally put the kibosh on the scheme, championed by Ed Miliband. But is that a sufficient reflection on the failure of green policies and economics? I pointed out that there have been at least three significant catastrophic failures of the green ‘industrial revolution’ in the past year or so: the collapse of BritishVolt before it was even charged; the AMTE half-gigafactory going into administration; and the collapse of EV van maker Arrival before it had even departed. There is also the recent news that Danish wind giant is to shed 800 jobs, and won’t be posting any dividends.
This takes us to the third ‘pillar’ of Blair’s white paper…
Energy reliability
The holy grail of green energy is no energy. Years ago, green wonks conceived of the notion of negawatts — promises not to use energy, which could be traded as a commodity, and bought by wealthier people, to offset their indulgences.
National Grid recently introduced its ‘Demand Flexibility Service’ (DFS), which allows consumers,
… to earn rewards for shifting electricity usage outside of peak demand hours. This allows the Electricity System Operator (ESO) to manage supply through periods when margins are tight.
The scheme is spun as a positive for the consumer. But the stark fact is that, despite deindustrialisation reducing grid demand, and despite countless £billions having been ‘invested’ in green generating capacity, including more than £60 billion on green energy subsidies through the Renewable Obligation scheme, ‘margins’ are still ‘tight’.
Energy intensive industries have long been asked to participate in such schemes, of course. But their demands are immense. As the proportion of ‘green’ energy generators on the grid increased, and as coal plants were shut down, and nuclear generators not replaced, it became clear that rather than the grid responding to the needs of people, people would have to organise their lives around the grid. A 2011 Telegraph article quotes National Grid CE, Steve Holliday, admitting that, in the future, our lives would be dictated by the weather once again, just as they were for people who lived before the era of industrialisation.
So much for ‘energy reliability’ — the third pillar of Blair’s Energy Whitepaper.
And that leaves only ‘environment’ as the last and only pillar that is standing. And of course, that is because it is the environment that will take precedence over any other concerns in politicians thinking.
This post is already getting a bit long. But it is that last point that I had intended to explore here: how did we get here? Why is the environment the thing that our governments and public bodies assert over any other thing, no matter what the evidence? Why is it impossible for political leaders to admit that the policy agenda has failed?
We have not yet even got past Blair’s introduction to his whitepaper. So I shall pick up these questions in the next post here. I think we can conclude, however, that we are now well into the third decade of catastrophic energy and climate policy failure. And there is very little evidence that politicians have noticed. Here is Blair’s preamble in full…
Energy is vital to a modern economy. We need energy to heat and light our homes, to help us travel in to power our businesses. Our economy has also benefited hugely from our country’s resources of fossil fuels – coal, oil and gas.
However, our energy system faces new challenges. Energy can no longer be thought of as a short term domestic issue. Climate change – largely caused by burning fossil fuels – threatens major consequences in the UK and worldwide, most seriously for the poorest countries who are least able to cope. Our energy supplies will increasingly depend on imported coal and oil from Europe and beyond. At the same time, we need competitive markets to keep down costs and keep energy affordable for our businesses, industries, and households.
This white paper addresses those challenges. It keeps a new direction for energy policy. We need urgent global action to tackle climate change. We are showing leadership by putting the UK on a path to a 60% reduction in its carbon dioxide emissions by 2050. And, because this country cannot solve this problem alone, we will work internationally to secure the major cuts in emissions that will be needed worldwide.
Our analysis suggests that, by working with others, the costs of action will be acceptable- and the costs of inaction are potentially much greater. And as we move to a new, low carbon economy, that are major opportunities for our businesses to become world leaders in the technologies we will need for the future – such as fuel cells, offshore wind and tidal power. Science and technology are vital, and we will be supporting further research and development in these areas.
In parallel, we need access to a wide range of energy sources and technologies and a robust infrastructure to bring the energy to where we want to use it. We will maintain competitive markets in the UK and press for further liberalisation in Europe. And we renew our commitment that no household in Britain should be living in fuel poverty by 2016-18.
This white paper is a milestone in energy policy. It is based on the full pillars of the environment, energy reliability, affordable energy for the poorest, and competitive markets for our businesses, industries and households.
This white paper sets out a strategy for the long term, to give industry the confidence to invest to help us deliver our goals- a truly sustainable energy policy.
I’ve made this post free to all to read. Please consider becoming a paid subscriber to help continue this Substack, and the research here and at Climate Debate UK.