Call for honesty about the costs of green energy

Oct 2 2008 by William Green, The Journal

THE boss of energy company E.ON UK has called for more honesty about the hidden costs to consumers of switching to more environmentally-friendly power.

Chief executive Paul Golby backed moving to more green power and is working on capturing carbon emissions from power stations, but said subsidies to encourage that switch were not shown on customers’ bills.

And he warned that the UK needed a diverse mix of energy sources, stressing that wind farms alone were not the answer to keeping the country’s lights on.

At a Tory party fringe event, Dr Golby also revealed that a senior E.ON executive who joked that high gas and energy prices would mean “more money for us” had not been sacked but was facing disciplinary action.

His comments come after campaigners warned pensioners already hit by soaring bills will be forced to choose between eating and heating after Gordon Brown unveiled a new £100bn “dash” for renewable energy earlier this year.

Thousands more wind turbines are planned and Business Secretary John Hutton said “windy” Northumberland would be a suitable location for some of them, while new power lines will be needed to connect them to the National Grid.

Domestic electricity bills could rise annually by up to £13 from 2010, £19 from 2015 and £53 from 2020 before dropping to a maximum increase of £48 from 2025, as costs of transforming energy production and subsidies to develop renewables are passed on to consumers.

Household gas prices could rise by up to £30 from 2015 and £209 from 2020 under the Government’s drive to meet a target to source 15% of all energy consumption from renewables by 2020.

The average annual bill is currently £643 for gas and £412 for electricity – although cheaper deals are available.

Referring to pricing, Dr Golby said: “I think we owe our customers – my customers, your voters – an obligation of telling them the truth about how much things are costing because so much is hidden at the moment in the bill.”

And he warned against depending too heavily on intermittent wind power, saying: “So what that means is if we are going to keep the lights on at peak demand, that for every 100 wind farms we build, we have to build 80 equivalent back-ups.”

He added: “I certainly don’t want to bet my future or our country’s future in hoping we get there and then coming back and asking me to build a coal-fired power station at the last moment because I can’t do it. The lights will go out.”

Quizzed about using North East coal, he said: “I can’t give you an answer in terms of British coal because I honestly just don’t know the economics.

“All I can say is, we need a diverse energy mix in this country so we would be foolish to ignore any source whether it is nuclear, whether it is coal, whether it is gas, whether it is renewable because this is a difficult problem to crack and we are going to need all these technologies.”