Just to weigh in on this, the average UK energy bill is made up of 3 components:
1. Wholesale energy prices, for gas it's dependent on international markets mainly, for power is more dependent on gas price + domestic wind/solar production
2. Transportation and balancing costs, it takes money to maintain all the pilons and gas pipes without anything exploding
3. Subsidies, it also cost money to convince renewable developers to build their wind/solar sites in the UK, this money doesn't come from tax revenues, it gets added to end user bills instead
So just because wholesale prices drop, does not mean end user bills drop, in fact, by increasing renewable generation, you increase balancing and subsidy costs, so numbers 2 and 3 above will increase, whilst number 1 decreases.
The road to net 0 will not decrease bills in the next 20 years, it'll decrease bills after that in general, and hopefully environmental damage.
In my opinion, it's a price we have to pay now for future generations.
The subsidies point is a rather frustrating misleading one though.
£2.4bn last year went on subsidies to renewables. Compare that to the £17.5 billion paid out in the same period in UK subsidies to fossil fuel companies (out of £7 trillion globally). These are huge multinationals making tens trillions in profit not innovating and not developing new technology or a public good. So no reason for these subsidies.
It's is only by choice that the government puts the cost for one of these onto the consumers bills and the other is paid for out of general taxation. Imagine if the fossil fuel subsidies had always been paid for out of bills. Imagine the outrage. We would all be calling for renewables. But because that is indirectly paid and more murky no one seems up in arms.
Thanks for posting, subsidising fossil fuels, when they make such huge profits is absolutely crazy.
It’s a hugely complex market. But these notes on the article do add some perspective ie it’s not a simple cash giveaway :
The research used the OECD definition of subsidies which encompasses:
Tax relief schemes given to fossil fuel companies, including special ‘ring fence corporation tax’ rules that allow them to deduct capital investment (purchases of new assets and equipment) from the overall amount that is liable for corporation tax
Financial support for the fossil fuel industry to invest in projects that allow for the continued production of fossil fuels – such as the government’s Carbon Capture, Usage and Storage Programme
Measures taken by governments to artificially lower the price of coal, oil or natural gas, including the Reduced Rate of VAT for Domestic Fuel and Power.
Just to weigh in on this, the average UK energy bill is made up of 3 components:
1. Wholesale energy prices, for gas it's dependent on international markets mainly, for power is more dependent on gas price + domestic wind/solar production
2. Transportation and balancing costs, it takes money to maintain all the pilons and gas pipes without anything exploding
3. Subsidies, it also cost money to convince renewable developers to build their wind/solar sites in the UK, this money doesn't come from tax revenues, it gets added to end user bills instead
So just because wholesale prices drop, does not mean end user bills drop, in fact, by increasing renewable generation, you increase balancing and subsidy costs, so numbers 2 and 3 above will increase, whilst number 1 decreases.
The road to net 0 will not decrease bills in the next 20 years, it'll decrease bills after that in general, and hopefully environmental damage.
In my opinion, it's a price we have to pay now for future generations.
The subsidies point is a rather frustrating misleading one though.
£2.4bn last year went on subsidies to renewables. Compare that to the £17.5 billion paid out in the same period in UK subsidies to fossil fuel companies (out of £7 trillion globally). These are huge multinationals making tens trillions in profit not innovating and not developing new technology or a public good. So no reason for these subsidies.
It's is only by choice that the government puts the cost for one of these onto the consumers bills and the other is paid for out of general taxation. Imagine if the fossil fuel subsidies had always been paid for out of bills. Imagine the outrage. We would all be calling for renewables. But because that is indirectly paid and more murky no one seems up in arms.
Thanks for posting, subsidising fossil fuels, when they make such huge profits is absolutely crazy.
It’s a hugely complex market. But these notes on the article do add some perspective ie it’s not a simple cash giveaway :
The research used the OECD definition of subsidies which encompasses:
Tax relief schemes given to fossil fuel companies, including special ‘ring fence corporation tax’ rules that allow them to deduct capital investment (purchases of new assets and equipment) from the overall amount that is liable for corporation tax
Financial support for the fossil fuel industry to invest in projects that allow for the continued production of fossil fuels – such as the government’s Carbon Capture, Usage and Storage Programme
Measures taken by governments to artificially lower the price of coal, oil or natural gas, including the Reduced Rate of VAT for Domestic Fuel and Power.
I don't believe those make up that large a proportion of it. Either way none of it would be necessary with Net Zero. So still a massive saving on subsidies if we phase out fossil fuels
I'm massively supportive of renewable and can't wait until we are net zero but I hate this kind of dishonest propaganda. The first is a tax break available to literally all companies. The second is support for carbon capture not production of fossil fuels. Utterly dishonest to conflate the two. The third is a benefit to consumers of all energy. It has zero impact on the profitability of fossil fuel companies.
Just to weigh in on this, the average UK energy bill is made up of 3 components:
1. Wholesale energy prices, for gas it's dependent on international markets mainly, for power is more dependent on gas price + domestic wind/solar production
2. Transportation and balancing costs, it takes money to maintain all the pilons and gas pipes without anything exploding
3. Subsidies, it also cost money to convince renewable developers to build their wind/solar sites in the UK, this money doesn't come from tax revenues, it gets added to end user bills instead
So just because wholesale prices drop, does not mean end user bills drop, in fact, by increasing renewable generation, you increase balancing and subsidy costs, so numbers 2 and 3 above will increase, whilst number 1 decreases.
The road to net 0 will not decrease bills in the next 20 years, it'll decrease bills after that in general, and hopefully environmental damage.
In my opinion, it's a price we have to pay now for future generations.
The subsidies point is a rather frustrating misleading one though.
£2.4bn last year went on subsidies to renewables. Compare that to the £17.5 billion paid out in the same period in UK subsidies to fossil fuel companies (out of £7 trillion globally). These are huge multinationals making tens trillions in profit not innovating and not developing new technology or a public good. So no reason for these subsidies.
It's is only by choice that the government puts the cost for one of these onto the consumers bills and the other is paid for out of general taxation. Imagine if the fossil fuel subsidies had always been paid for out of bills. Imagine the outrage. We would all be calling for renewables. But because that is indirectly paid and more murky no one seems up in arms.
Thanks for posting, subsidising fossil fuels, when they make such huge profits is absolutely crazy.
It’s a hugely complex market. But these notes on the article do add some perspective ie it’s not a simple cash giveaway :
The research used the OECD definition of subsidies which encompasses:
Tax relief schemes given to fossil fuel companies, including special ‘ring fence corporation tax’ rules that allow them to deduct capital investment (purchases of new assets and equipment) from the overall amount that is liable for corporation tax
Financial support for the fossil fuel industry to invest in projects that allow for the continued production of fossil fuels – such as the government’s Carbon Capture, Usage and Storage Programme
Measures taken by governments to artificially lower the price of coal, oil or natural gas, including the Reduced Rate of VAT for Domestic Fuel and Power.
I don't believe those make up that large a proportion of it. Either way none of it would be necessary with Net Zero. So still a massive saving on subsidies if we phase out fossil fuels
And which is the direction of travel. ‘Green’ requires investment subsidies first.
The speed of change is a whole other story.
Though why you don’t believe ‘they don’t make up a large proportion’ I’m not sure. The report sats(as I read it) £6.9b is down to VAT.
Just to weigh in on this, the average UK energy bill is made up of 3 components:
1. Wholesale energy prices, for gas it's dependent on international markets mainly, for power is more dependent on gas price + domestic wind/solar production
2. Transportation and balancing costs, it takes money to maintain all the pilons and gas pipes without anything exploding
3. Subsidies, it also cost money to convince renewable developers to build their wind/solar sites in the UK, this money doesn't come from tax revenues, it gets added to end user bills instead
So just because wholesale prices drop, does not mean end user bills drop, in fact, by increasing renewable generation, you increase balancing and subsidy costs, so numbers 2 and 3 above will increase, whilst number 1 decreases.
The road to net 0 will not decrease bills in the next 20 years, it'll decrease bills after that in general, and hopefully environmental damage.
In my opinion, it's a price we have to pay now for future generations.
The subsidies point is a rather frustrating misleading one though.
£2.4bn last year went on subsidies to renewables. Compare that to the £17.5 billion paid out in the same period in UK subsidies to fossil fuel companies (out of £7 trillion globally). These are huge multinationals making tens trillions in profit not innovating and not developing new technology or a public good. So no reason for these subsidies.
It's is only by choice that the government puts the cost for one of these onto the consumers bills and the other is paid for out of general taxation. Imagine if the fossil fuel subsidies had always been paid for out of bills. Imagine the outrage. We would all be calling for renewables. But because that is indirectly paid and more murky no one seems up in arms.
Thanks for posting, subsidising fossil fuels, when they make such huge profits is absolutely crazy.
It’s a hugely complex market. But these notes on the article do add some perspective ie it’s not a simple cash giveaway :
The research used the OECD definition of subsidies which encompasses:
Tax relief schemes given to fossil fuel companies, including special ‘ring fence corporation tax’ rules that allow them to deduct capital investment (purchases of new assets and equipment) from the overall amount that is liable for corporation tax
Financial support for the fossil fuel industry to invest in projects that allow for the continued production of fossil fuels – such as the government’s Carbon Capture, Usage and Storage Programme
Measures taken by governments to artificially lower the price of coal, oil or natural gas, including the Reduced Rate of VAT for Domestic Fuel and Power.
I don't believe those make up that large a proportion of it. Either way none of it would be necessary with Net Zero. So still a massive saving on subsidies if we phase out fossil fuels
Net zero requires carbon capture. The clue is in the "net"
Just to weigh in on this, the average UK energy bill is made up of 3 components:
1. Wholesale energy prices, for gas it's dependent on international markets mainly, for power is more dependent on gas price + domestic wind/solar production
2. Transportation and balancing costs, it takes money to maintain all the pilons and gas pipes without anything exploding
3. Subsidies, it also cost money to convince renewable developers to build their wind/solar sites in the UK, this money doesn't come from tax revenues, it gets added to end user bills instead
So just because wholesale prices drop, does not mean end user bills drop, in fact, by increasing renewable generation, you increase balancing and subsidy costs, so numbers 2 and 3 above will increase, whilst number 1 decreases.
The road to net 0 will not decrease bills in the next 20 years, it'll decrease bills after that in general, and hopefully environmental damage.
In my opinion, it's a price we have to pay now for future generations.
The subsidies point is a rather frustrating misleading one though.
£2.4bn last year went on subsidies to renewables. Compare that to the £17.5 billion paid out in the same period in UK subsidies to fossil fuel companies (out of £7 trillion globally). These are huge multinationals making tens trillions in profit not innovating and not developing new technology or a public good. So no reason for these subsidies.
It's is only by choice that the government puts the cost for one of these onto the consumers bills and the other is paid for out of general taxation. Imagine if the fossil fuel subsidies had always been paid for out of bills. Imagine the outrage. We would all be calling for renewables. But because that is indirectly paid and more murky no one seems up in arms.
Thanks for posting, subsidising fossil fuels, when they make such huge profits is absolutely crazy.
It’s a hugely complex market. But these notes on the article do add some perspective ie it’s not a simple cash giveaway :
The research used the OECD definition of subsidies which encompasses:
Tax relief schemes given to fossil fuel companies, including special ‘ring fence corporation tax’ rules that allow them to deduct capital investment (purchases of new assets and equipment) from the overall amount that is liable for corporation tax
Financial support for the fossil fuel industry to invest in projects that allow for the continued production of fossil fuels – such as the government’s Carbon Capture, Usage and Storage Programme
Measures taken by governments to artificially lower the price of coal, oil or natural gas, including the Reduced Rate of VAT for Domestic Fuel and Power.
I don't believe those make up that large a proportion of it. Either way none of it would be necessary with Net Zero. So still a massive saving on subsidies if we phase out fossil fuels
And which is the direction of travel. ‘Green’ requires investment subsidies first.
The speed of change is a whole other story.
Though why you don’t believe ‘they don’t make up a large proportion’ I’m not sure. The report sats(as I read it) £6.9b is down to VAT.
I think important to note, the VAT 'subsidy' doesn't actually affect the fossil fuel companies, VAT is only paid by the end user, so the producers and whole sellers aren't ultimately liable for it.
I believe the amount in that source is due to VAT only being 5% on domestic gas bills, were they to end that then VAT would become 20% on gas bills, all paid for by the end users.
Just to weigh in on this, the average UK energy bill is made up of 3 components:
1. Wholesale energy prices, for gas it's dependent on international markets mainly, for power is more dependent on gas price + domestic wind/solar production
2. Transportation and balancing costs, it takes money to maintain all the pilons and gas pipes without anything exploding
3. Subsidies, it also cost money to convince renewable developers to build their wind/solar sites in the UK, this money doesn't come from tax revenues, it gets added to end user bills instead
So just because wholesale prices drop, does not mean end user bills drop, in fact, by increasing renewable generation, you increase balancing and subsidy costs, so numbers 2 and 3 above will increase, whilst number 1 decreases.
The road to net 0 will not decrease bills in the next 20 years, it'll decrease bills after that in general, and hopefully environmental damage.
In my opinion, it's a price we have to pay now for future generations.
The subsidies point is a rather frustrating misleading one though.
£2.4bn last year went on subsidies to renewables. Compare that to the £17.5 billion paid out in the same period in UK subsidies to fossil fuel companies (out of £7 trillion globally). These are huge multinationals making tens trillions in profit not innovating and not developing new technology or a public good. So no reason for these subsidies.
It's is only by choice that the government puts the cost for one of these onto the consumers bills and the other is paid for out of general taxation. Imagine if the fossil fuel subsidies had always been paid for out of bills. Imagine the outrage. We would all be calling for renewables. But because that is indirectly paid and more murky no one seems up in arms.
Thanks for posting, subsidising fossil fuels, when they make such huge profits is absolutely crazy.
It’s a hugely complex market. But these notes on the article do add some perspective ie it’s not a simple cash giveaway :
The research used the OECD definition of subsidies which encompasses:
Tax relief schemes given to fossil fuel companies, including special ‘ring fence corporation tax’ rules that allow them to deduct capital investment (purchases of new assets and equipment) from the overall amount that is liable for corporation tax
Financial support for the fossil fuel industry to invest in projects that allow for the continued production of fossil fuels – such as the government’s Carbon Capture, Usage and Storage Programme
Measures taken by governments to artificially lower the price of coal, oil or natural gas, including the Reduced Rate of VAT for Domestic Fuel and Power.
I don't believe those make up that large a proportion of it. Either way none of it would be necessary with Net Zero. So still a massive saving on subsidies if we phase out fossil fuels
And which is the direction of travel. ‘Green’ requires investment subsidies first.
The speed of change is a whole other story.
Though why you don’t believe ‘they don’t make up a large proportion’ I’m not sure. The report sats(as I read it) £6.9b is down to VAT.
I think important to note, the VAT 'subsidy' doesn't actually affect the fossil fuel companies, VAT is only paid by the end user, so the producers and whole sellers aren't ultimately liable for it.
I believe the amount in that source is due to VAT only being 5% on domestic gas bills, were they to end that then VAT would become 20% on gas bills, all paid for by the end users.
Exactly. That’s my point.
The headline of subsidies implies to the benefit of the multi national / large corporate whereas it’s the consumer benefiting.
Just to weigh in on this, the average UK energy bill is made up of 3 components:
1. Wholesale energy prices, for gas it's dependent on international markets mainly, for power is more dependent on gas price + domestic wind/solar production
2. Transportation and balancing costs, it takes money to maintain all the pilons and gas pipes without anything exploding
3. Subsidies, it also cost money to convince renewable developers to build their wind/solar sites in the UK, this money doesn't come from tax revenues, it gets added to end user bills instead
So just because wholesale prices drop, does not mean end user bills drop, in fact, by increasing renewable generation, you increase balancing and subsidy costs, so numbers 2 and 3 above will increase, whilst number 1 decreases.
The road to net 0 will not decrease bills in the next 20 years, it'll decrease bills after that in general, and hopefully environmental damage.
In my opinion, it's a price we have to pay now for future generations.
The subsidies point is a rather frustrating misleading one though.
£2.4bn last year went on subsidies to renewables. Compare that to the £17.5 billion paid out in the same period in UK subsidies to fossil fuel companies (out of £7 trillion globally). These are huge multinationals making tens trillions in profit not innovating and not developing new technology or a public good. So no reason for these subsidies.
It's is only by choice that the government puts the cost for one of these onto the consumers bills and the other is paid for out of general taxation. Imagine if the fossil fuel subsidies had always been paid for out of bills. Imagine the outrage. We would all be calling for renewables. But because that is indirectly paid and more murky no one seems up in arms.
Thanks for posting, subsidising fossil fuels, when they make such huge profits is absolutely crazy.
It’s a hugely complex market. But these notes on the article do add some perspective ie it’s not a simple cash giveaway :
The research used the OECD definition of subsidies which encompasses:
Tax relief schemes given to fossil fuel companies, including special ‘ring fence corporation tax’ rules that allow them to deduct capital investment (purchases of new assets and equipment) from the overall amount that is liable for corporation tax
Financial support for the fossil fuel industry to invest in projects that allow for the continued production of fossil fuels – such as the government’s Carbon Capture, Usage and Storage Programme
Measures taken by governments to artificially lower the price of coal, oil or natural gas, including the Reduced Rate of VAT for Domestic Fuel and Power.
I don't believe those make up that large a proportion of it. Either way none of it would be necessary with Net Zero. So still a massive saving on subsidies if we phase out fossil fuels
And which is the direction of travel. ‘Green’ requires investment subsidies first.
The speed of change is a whole other story.
Though why you don’t believe ‘they don’t make up a large proportion’ I’m not sure. The report sats(as I read it) £6.9b is down to VAT.
I think important to note, the VAT 'subsidy' doesn't actually affect the fossil fuel companies, VAT is only paid by the end user, so the producers and whole sellers aren't ultimately liable for it.
I believe the amount in that source is due to VAT only being 5% on domestic gas bills, were they to end that then VAT would become 20% on gas bills, all paid for by the end users.
Exactly. That’s my point.
The headline of subsidies implies to the benefit of the multi national / large corporate whereas it’s the consumer benefiting.
Dangerous headline statement.
Yep sorry, I got a bit lost in the chain of comments.
Just to weigh in on this, the average UK energy bill is made up of 3 components:
1. Wholesale energy prices, for gas it's dependent on international markets mainly, for power is more dependent on gas price + domestic wind/solar production
2. Transportation and balancing costs, it takes money to maintain all the pilons and gas pipes without anything exploding
3. Subsidies, it also cost money to convince renewable developers to build their wind/solar sites in the UK, this money doesn't come from tax revenues, it gets added to end user bills instead
So just because wholesale prices drop, does not mean end user bills drop, in fact, by increasing renewable generation, you increase balancing and subsidy costs, so numbers 2 and 3 above will increase, whilst number 1 decreases.
The road to net 0 will not decrease bills in the next 20 years, it'll decrease bills after that in general, and hopefully environmental damage.
In my opinion, it's a price we have to pay now for future generations.
The subsidies point is a rather frustrating misleading one though.
£2.4bn last year went on subsidies to renewables. Compare that to the £17.5 billion paid out in the same period in UK subsidies to fossil fuel companies (out of £7 trillion globally). These are huge multinationals making tens trillions in profit not innovating and not developing new technology or a public good. So no reason for these subsidies.
It's is only by choice that the government puts the cost for one of these onto the consumers bills and the other is paid for out of general taxation. Imagine if the fossil fuel subsidies had always been paid for out of bills. Imagine the outrage. We would all be calling for renewables. But because that is indirectly paid and more murky no one seems up in arms.
Thanks for posting, subsidising fossil fuels, when they make such huge profits is absolutely crazy.
It’s a hugely complex market. But these notes on the article do add some perspective ie it’s not a simple cash giveaway :
The research used the OECD definition of subsidies which encompasses:
Tax relief schemes given to fossil fuel companies, including special ‘ring fence corporation tax’ rules that allow them to deduct capital investment (purchases of new assets and equipment) from the overall amount that is liable for corporation tax
Financial support for the fossil fuel industry to invest in projects that allow for the continued production of fossil fuels – such as the government’s Carbon Capture, Usage and Storage Programme
Measures taken by governments to artificially lower the price of coal, oil or natural gas, including the Reduced Rate of VAT for Domestic Fuel and Power.
I don't believe those make up that large a proportion of it. Either way none of it would be necessary with Net Zero. So still a massive saving on subsidies if we phase out fossil fuels
Net zero requires carbon capture. The clue is in the "net"
Yes to an extent in the short term - long term decarbonisation is possible to the point where capture isn't needed. Capture is only ever a short term solution. and the vast majority of it is on the "renewable" side of the equation. Both in terms of who is doing it and where its funded. It doesn't need subsidies to fossil fuel giants to make it happen.
Just to weigh in on this, the average UK energy bill is made up of 3 components:
1. Wholesale energy prices, for gas it's dependent on international markets mainly, for power is more dependent on gas price + domestic wind/solar production
2. Transportation and balancing costs, it takes money to maintain all the pilons and gas pipes without anything exploding
3. Subsidies, it also cost money to convince renewable developers to build their wind/solar sites in the UK, this money doesn't come from tax revenues, it gets added to end user bills instead
So just because wholesale prices drop, does not mean end user bills drop, in fact, by increasing renewable generation, you increase balancing and subsidy costs, so numbers 2 and 3 above will increase, whilst number 1 decreases.
The road to net 0 will not decrease bills in the next 20 years, it'll decrease bills after that in general, and hopefully environmental damage.
In my opinion, it's a price we have to pay now for future generations.
The subsidies point is a rather frustrating misleading one though.
£2.4bn last year went on subsidies to renewables. Compare that to the £17.5 billion paid out in the same period in UK subsidies to fossil fuel companies (out of £7 trillion globally). These are huge multinationals making tens trillions in profit not innovating and not developing new technology or a public good. So no reason for these subsidies.
It's is only by choice that the government puts the cost for one of these onto the consumers bills and the other is paid for out of general taxation. Imagine if the fossil fuel subsidies had always been paid for out of bills. Imagine the outrage. We would all be calling for renewables. But because that is indirectly paid and more murky no one seems up in arms.
Thanks for posting, subsidising fossil fuels, when they make such huge profits is absolutely crazy.
It’s a hugely complex market. But these notes on the article do add some perspective ie it’s not a simple cash giveaway :
The research used the OECD definition of subsidies which encompasses:
Tax relief schemes given to fossil fuel companies, including special ‘ring fence corporation tax’ rules that allow them to deduct capital investment (purchases of new assets and equipment) from the overall amount that is liable for corporation tax
Financial support for the fossil fuel industry to invest in projects that allow for the continued production of fossil fuels – such as the government’s Carbon Capture, Usage and Storage Programme
Measures taken by governments to artificially lower the price of coal, oil or natural gas, including the Reduced Rate of VAT for Domestic Fuel and Power.
I don't believe those make up that large a proportion of it. Either way none of it would be necessary with Net Zero. So still a massive saving on subsidies if we phase out fossil fuels
And which is the direction of travel. ‘Green’ requires investment subsidies first.
The speed of change is a whole other story.
Though why you don’t believe ‘they don’t make up a large proportion’ I’m not sure. The report sats(as I read it) £6.9b is down to VAT.
I think important to note, the VAT 'subsidy' doesn't actually affect the fossil fuel companies, VAT is only paid by the end user, so the producers and whole sellers aren't ultimately liable for it.
I believe the amount in that source is due to VAT only being 5% on domestic gas bills, were they to end that then VAT would become 20% on gas bills, all paid for by the end users.
Exactly. That’s my point.
The headline of subsidies implies to the benefit of the multi national / large corporate whereas it’s the consumer benefiting.
Dangerous headline statement.
Yep sorry, I got a bit lost in the chain of comments.
Definitely in agreement on this.
That VAT "subsidy" figure is bollocks.
Sure, a government could decide to whack up VAT on domestic fuel to 20%, but the fact they haven't hardly amounts to a subsidy. I mean, if we're going down that route you could also say the government "subsidises" the food industry, because most food is zero-rated. Or the book industry, for the same reason. Or maybe it subsidises private landlords because residential rents are exempt. As are funerals.
Just to weigh in on this, the average UK energy bill is made up of 3 components:
1. Wholesale energy prices, for gas it's dependent on international markets mainly, for power is more dependent on gas price + domestic wind/solar production
2. Transportation and balancing costs, it takes money to maintain all the pilons and gas pipes without anything exploding
3. Subsidies, it also cost money to convince renewable developers to build their wind/solar sites in the UK, this money doesn't come from tax revenues, it gets added to end user bills instead
So just because wholesale prices drop, does not mean end user bills drop, in fact, by increasing renewable generation, you increase balancing and subsidy costs, so numbers 2 and 3 above will increase, whilst number 1 decreases.
The road to net 0 will not decrease bills in the next 20 years, it'll decrease bills after that in general, and hopefully environmental damage.
In my opinion, it's a price we have to pay now for future generations.
The subsidies point is a rather frustrating misleading one though.
£2.4bn last year went on subsidies to renewables. Compare that to the £17.5 billion paid out in the same period in UK subsidies to fossil fuel companies (out of £7 trillion globally). These are huge multinationals making tens trillions in profit not innovating and not developing new technology or a public good. So no reason for these subsidies.
It's is only by choice that the government puts the cost for one of these onto the consumers bills and the other is paid for out of general taxation. Imagine if the fossil fuel subsidies had always been paid for out of bills. Imagine the outrage. We would all be calling for renewables. But because that is indirectly paid and more murky no one seems up in arms.
Thanks for posting, subsidising fossil fuels, when they make such huge profits is absolutely crazy.
It’s a hugely complex market. But these notes on the article do add some perspective ie it’s not a simple cash giveaway :
The research used the OECD definition of subsidies which encompasses:
Tax relief schemes given to fossil fuel companies, including special ‘ring fence corporation tax’ rules that allow them to deduct capital investment (purchases of new assets and equipment) from the overall amount that is liable for corporation tax
Financial support for the fossil fuel industry to invest in projects that allow for the continued production of fossil fuels – such as the government’s Carbon Capture, Usage and Storage Programme
Measures taken by governments to artificially lower the price of coal, oil or natural gas, including the Reduced Rate of VAT for Domestic Fuel and Power.
I don't believe those make up that large a proportion of it. Either way none of it would be necessary with Net Zero. So still a massive saving on subsidies if we phase out fossil fuels
And which is the direction of travel. ‘Green’ requires investment subsidies first.
The speed of change is a whole other story.
Though why you don’t believe ‘they don’t make up a large proportion’ I’m not sure. The report sats(as I read it) £6.9b is down to VAT.
I think important to note, the VAT 'subsidy' doesn't actually affect the fossil fuel companies, VAT is only paid by the end user, so the producers and whole sellers aren't ultimately liable for it.
I believe the amount in that source is due to VAT only being 5% on domestic gas bills, were they to end that then VAT would become 20% on gas bills, all paid for by the end users.
Exactly. That’s my point.
The headline of subsidies implies to the benefit of the multi national / large corporate whereas it’s the consumer benefiting.
Dangerous headline statement.
Yep sorry, I got a bit lost in the chain of comments.
Definitely in agreement on this.
That VAT "subsidy" figure is bollocks.
Sure, a government could decide to whack up VAT on domestic fuel to 20%, but the fact they haven't hardly amounts to a subsidy. I mean, if we're going down that route you could also say the government "subsidises" the food industry, because most food is zero-rated. Or the book industry, for the same reason. Or maybe it subsidises private landlords because residential rents are exempt. As are funerals.
Someone will be claiming VAT's a "tariff" next.
To be fair it's not saying all VAT is included just VAT relief. It is an OECD measure of subsidies so whilst maybe not perfect it is clearly a recognised and comparable metric.
Just to weigh in on this, the average UK energy bill is made up of 3 components:
1. Wholesale energy prices, for gas it's dependent on international markets mainly, for power is more dependent on gas price + domestic wind/solar production
2. Transportation and balancing costs, it takes money to maintain all the pilons and gas pipes without anything exploding
3. Subsidies, it also cost money to convince renewable developers to build their wind/solar sites in the UK, this money doesn't come from tax revenues, it gets added to end user bills instead
So just because wholesale prices drop, does not mean end user bills drop, in fact, by increasing renewable generation, you increase balancing and subsidy costs, so numbers 2 and 3 above will increase, whilst number 1 decreases.
The road to net 0 will not decrease bills in the next 20 years, it'll decrease bills after that in general, and hopefully environmental damage.
In my opinion, it's a price we have to pay now for future generations.
The subsidies point is a rather frustrating misleading one though.
£2.4bn last year went on subsidies to renewables. Compare that to the £17.5 billion paid out in the same period in UK subsidies to fossil fuel companies (out of £7 trillion globally). These are huge multinationals making tens trillions in profit not innovating and not developing new technology or a public good. So no reason for these subsidies.
It's is only by choice that the government puts the cost for one of these onto the consumers bills and the other is paid for out of general taxation. Imagine if the fossil fuel subsidies had always been paid for out of bills. Imagine the outrage. We would all be calling for renewables. But because that is indirectly paid and more murky no one seems up in arms.
Thanks for posting, subsidising fossil fuels, when they make such huge profits is absolutely crazy.
It’s a hugely complex market. But these notes on the article do add some perspective ie it’s not a simple cash giveaway :
The research used the OECD definition of subsidies which encompasses:
Tax relief schemes given to fossil fuel companies, including special ‘ring fence corporation tax’ rules that allow them to deduct capital investment (purchases of new assets and equipment) from the overall amount that is liable for corporation tax
Financial support for the fossil fuel industry to invest in projects that allow for the continued production of fossil fuels – such as the government’s Carbon Capture, Usage and Storage Programme
Measures taken by governments to artificially lower the price of coal, oil or natural gas, including the Reduced Rate of VAT for Domestic Fuel and Power.
I don't believe those make up that large a proportion of it. Either way none of it would be necessary with Net Zero. So still a massive saving on subsidies if we phase out fossil fuels
Net zero requires carbon capture. The clue is in the "net"
Yes to an extent in the short term - long term decarbonisation is possible to the point where capture isn't needed. Capture is only ever a short term solution. and the vast majority of it is on the "renewable" side of the equation. Both in terms of who is doing it and where its funded. It doesn't need subsidies to fossil fuel giants to make it happen.
No it's not. We will always need to use fossil fuels for certain products including renewable infrastructure. CCS is necessary to capture the emissions from those processes.
And oil and gas companies aren't promoting CCS projects so they aren't getting subsidies for them.
Just to weigh in on this, the average UK energy bill is made up of 3 components:
1. Wholesale energy prices, for gas it's dependent on international markets mainly, for power is more dependent on gas price + domestic wind/solar production
2. Transportation and balancing costs, it takes money to maintain all the pilons and gas pipes without anything exploding
3. Subsidies, it also cost money to convince renewable developers to build their wind/solar sites in the UK, this money doesn't come from tax revenues, it gets added to end user bills instead
So just because wholesale prices drop, does not mean end user bills drop, in fact, by increasing renewable generation, you increase balancing and subsidy costs, so numbers 2 and 3 above will increase, whilst number 1 decreases.
The road to net 0 will not decrease bills in the next 20 years, it'll decrease bills after that in general, and hopefully environmental damage.
In my opinion, it's a price we have to pay now for future generations.
The subsidies point is a rather frustrating misleading one though.
£2.4bn last year went on subsidies to renewables. Compare that to the £17.5 billion paid out in the same period in UK subsidies to fossil fuel companies (out of £7 trillion globally). These are huge multinationals making tens trillions in profit not innovating and not developing new technology or a public good. So no reason for these subsidies.
It's is only by choice that the government puts the cost for one of these onto the consumers bills and the other is paid for out of general taxation. Imagine if the fossil fuel subsidies had always been paid for out of bills. Imagine the outrage. We would all be calling for renewables. But because that is indirectly paid and more murky no one seems up in arms.
Thanks for posting, subsidising fossil fuels, when they make such huge profits is absolutely crazy.
It’s a hugely complex market. But these notes on the article do add some perspective ie it’s not a simple cash giveaway :
The research used the OECD definition of subsidies which encompasses:
Tax relief schemes given to fossil fuel companies, including special ‘ring fence corporation tax’ rules that allow them to deduct capital investment (purchases of new assets and equipment) from the overall amount that is liable for corporation tax
Financial support for the fossil fuel industry to invest in projects that allow for the continued production of fossil fuels – such as the government’s Carbon Capture, Usage and Storage Programme
Measures taken by governments to artificially lower the price of coal, oil or natural gas, including the Reduced Rate of VAT for Domestic Fuel and Power.
I don't believe those make up that large a proportion of it. Either way none of it would be necessary with Net Zero. So still a massive saving on subsidies if we phase out fossil fuels
And which is the direction of travel. ‘Green’ requires investment subsidies first.
The speed of change is a whole other story.
Though why you don’t believe ‘they don’t make up a large proportion’ I’m not sure. The report sats(as I read it) £6.9b is down to VAT.
I think important to note, the VAT 'subsidy' doesn't actually affect the fossil fuel companies, VAT is only paid by the end user, so the producers and whole sellers aren't ultimately liable for it.
I believe the amount in that source is due to VAT only being 5% on domestic gas bills, were they to end that then VAT would become 20% on gas bills, all paid for by the end users.
Exactly. That’s my point.
The headline of subsidies implies to the benefit of the multi national / large corporate whereas it’s the consumer benefiting.
Dangerous headline statement.
Yep sorry, I got a bit lost in the chain of comments.
Definitely in agreement on this.
That VAT "subsidy" figure is bollocks.
Sure, a government could decide to whack up VAT on domestic fuel to 20%, but the fact they haven't hardly amounts to a subsidy. I mean, if we're going down that route you could also say the government "subsidises" the food industry, because most food is zero-rated. Or the book industry, for the same reason. Or maybe it subsidises private landlords because residential rents are exempt. As are funerals.
Someone will be claiming VAT's a "tariff" next.
To be fair it's not saying all VAT is included just VAT relief. It is an OECD measure of subsidies so whilst maybe not perfect it is clearly a recognised and comparable metric.
What VAT "relief" exactly?
Given the amounts involved it seems the figures are just calculating the difference between VAT at 5% and 20%.
I don't have any skin in this game because, to be honest, I haven't paid enough attention on this thread to work out who is arguing there's a VAT subsidy or why. I'm just saying that because something isn't taxed as much as it could be that doesn't automatically equate to a "subsidy".
Just to weigh in on this, the average UK energy bill is made up of 3 components:
1. Wholesale energy prices, for gas it's dependent on international markets mainly, for power is more dependent on gas price + domestic wind/solar production
2. Transportation and balancing costs, it takes money to maintain all the pilons and gas pipes without anything exploding
3. Subsidies, it also cost money to convince renewable developers to build their wind/solar sites in the UK, this money doesn't come from tax revenues, it gets added to end user bills instead
So just because wholesale prices drop, does not mean end user bills drop, in fact, by increasing renewable generation, you increase balancing and subsidy costs, so numbers 2 and 3 above will increase, whilst number 1 decreases.
The road to net 0 will not decrease bills in the next 20 years, it'll decrease bills after that in general, and hopefully environmental damage.
In my opinion, it's a price we have to pay now for future generations.
The subsidies point is a rather frustrating misleading one though.
£2.4bn last year went on subsidies to renewables. Compare that to the £17.5 billion paid out in the same period in UK subsidies to fossil fuel companies (out of £7 trillion globally). These are huge multinationals making tens trillions in profit not innovating and not developing new technology or a public good. So no reason for these subsidies.
It's is only by choice that the government puts the cost for one of these onto the consumers bills and the other is paid for out of general taxation. Imagine if the fossil fuel subsidies had always been paid for out of bills. Imagine the outrage. We would all be calling for renewables. But because that is indirectly paid and more murky no one seems up in arms.
Thanks for posting, subsidising fossil fuels, when they make such huge profits is absolutely crazy.
It’s a hugely complex market. But these notes on the article do add some perspective ie it’s not a simple cash giveaway :
The research used the OECD definition of subsidies which encompasses:
Tax relief schemes given to fossil fuel companies, including special ‘ring fence corporation tax’ rules that allow them to deduct capital investment (purchases of new assets and equipment) from the overall amount that is liable for corporation tax
Financial support for the fossil fuel industry to invest in projects that allow for the continued production of fossil fuels – such as the government’s Carbon Capture, Usage and Storage Programme
Measures taken by governments to artificially lower the price of coal, oil or natural gas, including the Reduced Rate of VAT for Domestic Fuel and Power.
I don't believe those make up that large a proportion of it. Either way none of it would be necessary with Net Zero. So still a massive saving on subsidies if we phase out fossil fuels
And which is the direction of travel. ‘Green’ requires investment subsidies first.
The speed of change is a whole other story.
Though why you don’t believe ‘they don’t make up a large proportion’ I’m not sure. The report sats(as I read it) £6.9b is down to VAT.
I think important to note, the VAT 'subsidy' doesn't actually affect the fossil fuel companies, VAT is only paid by the end user, so the producers and whole sellers aren't ultimately liable for it.
I believe the amount in that source is due to VAT only being 5% on domestic gas bills, were they to end that then VAT would become 20% on gas bills, all paid for by the end users.
Exactly. That’s my point.
The headline of subsidies implies to the benefit of the multi national / large corporate whereas it’s the consumer benefiting.
Dangerous headline statement.
Yep sorry, I got a bit lost in the chain of comments.
Definitely in agreement on this.
That VAT "subsidy" figure is bollocks.
Sure, a government could decide to whack up VAT on domestic fuel to 20%, but the fact they haven't hardly amounts to a subsidy. I mean, if we're going down that route you could also say the government "subsidises" the food industry, because most food is zero-rated. Or the book industry, for the same reason. Or maybe it subsidises private landlords because residential rents are exempt. As are funerals.
Someone will be claiming VAT's a "tariff" next.
To be fair it's not saying all VAT is included just VAT relief. It is an OECD measure of subsidies so whilst maybe not perfect it is clearly a recognised and comparable metric.
So to the original point are you pro or against this subsidy?
My point remains the headline and subsequent reaction we jump to based on the interpretation of ‘subsidy’ becomes a different story when you look at the scale of this element and who benefits from it.
Comments
The research used the OECD definition of subsidies which encompasses:
I believe the amount in that source is due to VAT only being 5% on domestic gas bills, were they to end that then VAT would become 20% on gas bills, all paid for by the end users.
Definitely in agreement on this.
Sure, a government could decide to whack up VAT on domestic fuel to 20%, but the fact they haven't hardly amounts to a subsidy. I mean, if we're going down that route you could also say the government "subsidises" the food industry, because most food is zero-rated. Or the book industry, for the same reason. Or maybe it subsidises private landlords because residential rents are exempt. As are funerals.
Someone will be claiming VAT's a "tariff" next.
And oil and gas companies aren't promoting CCS projects so they aren't getting subsidies for them.
Given the amounts involved it seems the figures are just calculating the difference between VAT at 5% and 20%.
I don't have any skin in this game because, to be honest, I haven't paid enough attention on this thread to work out who is arguing there's a VAT subsidy or why. I'm just saying that because something isn't taxed as much as it could be that doesn't automatically equate to a "subsidy".