“households will be paying 41% more for their electricity bills as a result of green policies than the retail price is expected to be”
The impact of green measures is more considerable on business than for householders. Businesses that are
medium-sized users of energy currently face energy (gas plus electricity) costs that are on average
between 15% and 21% higher as a result of policies. By 2020 the impact is estimated to be
between 23% and 26%.
Policies are estimated to be
adding between 1% and 14% to energy bills for high-energy users in 2013 and
between 6% and 37% in 2020.
http://www.bbc.co.uk/news/uk-politics-24646527
Technically that's not a tax, it's a levy on the renewable energy generated that is paid for by energy utilities who then pass it onto consumer bills. But I'm happy for it to be regarded as a tax as to all and sundry, that's what it looks like.
The thing is, that story's from 2013 and the understanding of green levies/taxes has matured somewhat. The government's industrial strategy documents earlier this week, when discussing high energy costs, stated that "The difference between UK industrial electricity prices and those of other European countries is now mainly due to our higher wholesale prices and network costs." (It's
here if you want to read it for yourself. Page 91).
Energy bills and levies attached to them are more complicated than just sharing the cost of renewable subsidies though. For example the steel industry, which has complained about them for years, actually only has circa 2% of its overall production costs attributable to them (source:
Carbon Brief). And even then, they have historically received compensation for those levies and will, subject to state aid, be completely exempt from them in the future under the energy intensive industries exemption. It's not just steel that receives this, but a host of others including the chemicals industries.
Those levies still have to be paid though, and it's consumers that foot the bill. In essence, half the time you're not paying just the levies on energy you consume, but also a portion of the energy that a large number of multinational conglomerates with massive balance sheets consume. I would argue that that cost is far more a political tax than a strictly renewables one due to the exemption being a political machination to support and entice big business but, again, I'm happy to let that slide.
What should really be made public knowledge however is something called the Merit Order Effect. It's essentially a ranking of electricity sources which takes into account the cost of production, running costs, subsidies and everything in between. The concept was originally borne out of Germany but has been adopted worldwide, and a study conducted by Good Energy and University of Sheffield last year found that widespread, subsidy-backed deployment of cheap renewables (onshore wind and solar) was reducing the overall wholesale cost of energy in the UK (source:
here).
Basically, because onshore wind and solar have minute ongoing/operational costs (as yet the Tories haven't taxed the sun and the wind, but give them time) so over their operational lifetime the electricity they sell to the national grid comes at a competitive cost to that sold to the grid by other sources which have to pay for feedstock and what have you. As those renewable sources become more prevalent in the UK (renewable generation was about 25% of total demand in Q4 2016), the overall wholesale price falls as the grid is sourcing a greater proportion of its electricity more cheaply than before.
So, when the government says in its own industrial strategy that high UK electricity prices are largely down to wholesale prices, subsidy-backed deployment of renewables is actually
helping them come down. Your domestic energy bill isn't too dissimilar - environmental levies will be around 20% of your bill, whereas wholesale energy prices are around one third.
