Electricity shake-up could save consumers ‘up to £40bn’—Harrabin

Another grossly one sided report from Roger Harrabin:

Consumers in the UK could save billions of pounds thanks to major changes in the way electricity is made, used and stored, the government has said.

New rules will make it easier for people to generate their own power with solar panels, store it in batteries and sell it to the National Grid.

If they work, consumers will save £17bn to £40bn by 2050, according to the government and energy regulator Ofgem.

The rules are due to come into effect over the next year.

They will reduce costs for someone who allows their washing machine to be turned on by the internet to maximise use of cheap solar power on a sunny afternoon.

And they will even support people who agree to have their freezers switched off for a few minutes to smooth demand at peak times.

They’ll also benefit a business that allows its air-conditioning to be turned down briefly to help balance a spell of peak energy demand on the National Grid.

Among the first to gain from the rule changes will be people with solar panels and battery storage. At the moment they are charged tariffs when they import electricity into their home or export it back to the grid.

The government has realised that this rule must change because it deters people from using power more flexibly in a way that will benefit everyone.

http://www.bbc.co.uk/news/business-40699986

Firstly, the claimed savings of £17bn to £40bn are cumulative, not annual, as some may infer. In other words, the annual savings may be as low as £500 million on average, and most will not accrue for many years yet.

Secondly, the savings figure comes from an old OFGEM report published last November, which stated:

This could save consumers between £17-40 billion by 2050 according to research by Imperial College and the Carbon Trust.

Note the word COULD, and not WILL, which Harrabin writes.

In any event, the Imperial College analysis, which I covered here, involves an awful lot of other things than households having solar panels.

But the real issue is that these savings, even if they occur, will not be savings compared to what people pay for electricity now. The Climate Change Act will, according to some estimates, have cost the country £319bn by 2030. This cost will only skyrocket after 2030.

So we may save the odd £500bn a year or so, but this will be set against an extra £15bn or more, that the Act is costing.

For some reason, Harrabin forgets to mention this!

There is also the £12bn cost of rolling out smart meters, on which this whole idea depends, which does not appear to be in any of the calculations.

It is highly unlikely anyway that solar panels/batteries will yield any significant savings, as they will provide very little power in winter, when demand peaks. There is certainly currently no battery technology which can store enough power in summer to last through the winter months.

The main effect of these proposed new regulations will likely benefit rich homeowners with solar panels, at the expense of other bill payers. It is hard to think of a more regressive fiscal policy.

The cost of producing electricity in total will barely be affected, and if some people pay less, others are going to end up paying more.

This BBC article encapsulates the fact that Harrabin has long ceased to be an objective reporter on green issues, and is little more than an enthusiastic cheerleader.

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