We are currently at a unique and critical point in national and global history in terms of energy use. Fossil fuel prices are soaring, the heated debate over nuclear power continues to twist and turn. The tension between those pushing for or resisting renewable energy is mounting as the reality of climate change and diminishing gas and oil stores sinks in alongside profit-hungry energy companies.
Here in the UK, the Government plans to reform the electricity market next year, presenting a crucial opportunity to firmly establish renewable energy in the system and get the UK on track to achieve zero-carbon electricity by 2030. This is a target set by the Committee on Climate Change, the Government’s independent climate advisers.
However, politicians are not convinced that investing in renewable energy is the best way to keep the country’s power on and keep energy bills down. Climate sceptics and opponents claim that ‘green taxes’ are pushing up energy bills – which have almost doubled since 2004. The reality is a very different story.
The ‘big six’
Just six energy companies provide 99% of households in the UK. The so-called ‘big six’ are E.ON, EDF, Scottish Power, Centrica (who own British Gas), RWE npower and SSE. While an increasing number of people struggle to pay the high prices set by these companies, they have enjoyed an increase of nearly one third in profits since 2008: combined pre-tax profits in 2008 were £6.6bn, and by 2010 these had grown to £8.55bn.
The energy industry’s own watchdog, Ofgem, found all six companies guilty of overcharging customers by a total of £250 million last winter by not lowering bills when the price of electricity fell. This year, energy bills have risen by 12% already, while the ‘big six’ continue to report healthy profits and payments to shareholders. Their charging prices are now under investigation by Ofgem. Already, these investigations have revealed that these huge companies have a stranglehold over the market, have deliberately confused customers, and ‘adjusted prices in response for rising costs more quickly than when they reduced them when costs fell.’
‘Our energy market has been too cosy for too long,’ says Chris Huhne, Secretary of State for Energy and Climate Change; ‘we need more competition to keep bills down – it is madness that 99% of people get their energy from the big six.’
FOE campaigners pretending to be energy companies thanking the great British public for their massive profits.
Between 2000-2010, the real-term cost of coal and gas increased by 71% and 90% respectively, pushing up energy bills in the process. We’re hooked on these expensive dirty fuels, and the big six are feeding the addiction, keeping us trapped in an inefficient and increasingly expensive system that we simply can’t afford.
According to recent estimates by Consumer Focus and the Centre for Sustainable Energy, the latest rise in energy prices will plunge an additional 1.3 million households – that’s 2.8 million people – into fuel poverty, meaning that a staggering one in four UK households will be unable to heat their homes properly.
In Birmingham, 20% of residents are now in fuel poverty. Organisations offering advice are being inundated with people facing financial ruin because they cannot pay their fuel bills – on average, 400 people each day are flocking to Citizen’s Advice Bureaus (CAB) in Birmingham, concerned about fuel poverty.
‘Low incomes, rising fuel bills and energy-inefficient homes affect the majority of our clients,’ says Yvonne Davies, Chief Executive of Birmingham CAB. ‘Those with little or no disposable income have no choice but to ration fuel, which has serious implications for their health and wellbeing.’
The situation is so severe for some local people that they have been forced to live in just one room of their house and switch off fridges and freezers, risking food poisoning. Latest figures reveal that the number of food poisoning cases in Birmingham has almost doubled in the last three years.
With the price of fossil fuels continuing to spiral as stores are depleted, it’s time to quit the habit and look to alternatives. Now is the time to invest in a clean energy system, to improve efficiency by cutting waste, and generate green energy by harnessing the UK’s huge potential to generate electricity from the wind, waves and sun. Currently only 8% of our energy is produced in this way; three quarters comes from coal and gas.
Yet, in a major backwards step this month, the Government announced plans to slash incentives for local, clean energy schemes – so-called Feed-In-Tariffs (FiTs) – leaving local businesses in the renewable industry up in arms.
The cuts come as a blow to Birmingham’s chances of becoming a more sustainable city, says Birmingham Friends of the Earth’s energy campaigner Robert Pass. ‘We cannot afford to derail [local green energy] schemes if we are to meet our target of reducing Birmingham’s carbon emissions by 60% by 2026. This decision is short-sighted beyond belief.’
Time to act
Next year, the Government will bring its plans to reform the electricity market before Parliament, but currently the reforms will not bring the changes so desperately needed. The big companies will still be able to rule the roost. There is no commitment to the Committee on Climate Change’s target of almost zero-carbon electricity by 2030, no serious plan to cut energy waste, and the big six’s plans for a new generation of gas-fired power stations would get the go-ahead.
Now is the time to act. We need to get in there and turn the debate around, before winning the argument in Parliament next year. This is a once-in-a-generation opportunity to change our energy system for good – to get us on track to the zero-carbon electricity goal and provide affordable, clean energy for all. This can be done by dramatically increasing the use of green energy and massively reducing the amount of energy we use – but the politicians need some convincing.
This is where Friends of The Earth’s new Final Demand campaign comes in. We are calling for an urgent public enquiry into the power and influence of the ‘big six’ energy companies, to assess whether our current system is fit for purpose to deliver the clean, affordable and secure energy we need. We’re also demanding that the Government reconsiders its decision to axe the Feed-In-Tariff support for clean, local energy schemes.
You can help us make these demands by signing the petition to David Cameron at www.foe.co.uk/finaldemand, then getting your friends and family to do the same by sharing it via Facebook, Twitter, and email. We also have paper copies available at the Warehouse that you can take away and get more signatures. The Final Demand team is collecting signatures each weekend around Birmingham. In just a couple of hours, we collected over 200 signatures in Kings Heath, demonstrating how on-board the public are with the campaign.
Birmingham Friends of the Earth are also arranging for MP visits to see the benefits of local green energy projects for themselves, and getting local organisations to sign our joint statement.
This is an exciting time, and an unmissable opportunity to change things for the better. Join us now for clean, affordable energy for all and a much brighter future.
Sign the petition at www.foe.co.uk/finaldemand
Switch your energy provider to a green company such as Good Energy (the UK’s only 100% renewable electricity supplier) or Ecotricity. See www.consumerfocus.org.uk/get-advice/energy/households/how-to-switch for advice on changing suppliers.
FOE report ‘The Dirty Half Dozen’