Green leadership pushes many Brits into fuel poverty

Oct. 14, 2011
In its quest to lead the world toward green energy, the UK government is pushing energy consumers rapidly toward fuel poverty by its own definition.

In its quest to lead the world toward green energy, the UK government is pushing energy consumers rapidly toward fuel poverty by its own definition.

A UK household officially encounters fuel poverty when spending on electricity and natural gas as a share of income reaches 10%.

According to an Oct. 10 article by David Blair in the Financial Times, the British are heading there fast.

Since 2004, Blair reported, the average bill for dual-fuel customers—those who rely on the same supplier for gas and electricity—energy costs have risen more than six times faster than household incomes since 2004.

The UK government blames oil and gas markets. But it has been adding costs, too, with aggressive mandates for nonfossil energy requiring heavy subsidization.

Blair reported the average dual-fuel energy bill has climbed 117% in the past 7 years. Oil and gas prices haven’t risen that much. In the same period, median household income increased 18%.

“On present trends, energy costs will absorb 7.4% of median household income by 2013, 8.2% in 2014, and 10% in 2015,” he wrote.

The alarming trend has structural support. The government estimates investment requirements for a green energy system and the market reform that goes with it at £200 billion.

Utility shareholders will carry some of the load. Energy consumers must bear the rest.

“The UK is committed to reducing its greenhouse gas emissions by at least 80% by 2050, relative to 1990 levels,” the Department of Energy and Climate Change says on its web site. “We need a transformation of the UK economy while ensuring secure, low-carbon energy supplies to 2050.”

With households of median income destined for fuel poverty by 2015, the vaunted transformation seems well under way.

For fuel-poor Brits, increasing in number as they obviously are, this probably does not feel like progress.

Elsewhere, the rational position is to let the UK keep the lead in this race, which it acts so eager to win, into economic ruin.

(Online Oct. 14, 2011; author’s e-mail: [email protected])