Renewable energy is expensive
Many critics claim that clean energy technologies are too expensive, some of them pointing to subsidies as the main cause. For example, an article in The Economistmagazine in January 2014 claimed that countries with large amounts of renewable energy, such as Denmark and Germany, endure the highest electricity bills in the world and that in Britain electricity from wind farms costs twice as much as that from conventional sources. But just how accurate is this?
Actually, it is true, Denmark and Germany do have the most expensive electricity bills, but there are other explanations for this besides renewable energy. One reason is ineffective competition between suppliers. And then there’s tax.
It appears that before tax, electricity in Denmark is actually cheaper than that in the UK, at 9.35 pence per kilowatt hour compared to 14.8 pence. However, tax in Britain is set at a reduced rate of VAT which means that once tax is added, Danish households pay the highest electricity price in Europe, over half of which (57 percent) consists of tax, levies and VAT.
Another reason for high electricity bills is the introduction of new technology. At present, the UK is involved in the initial stages of a smart energy rollout, which some experts say will drive prices upwards. Another culprit though is nuclear power, with Hinkley Point C (Hinkley C) likely to become one of the most expensive power projects in the UK for many years, particularly given that the price of nuclearhas been rising steadily for the past 50 years. Hinkley C will add a predicted £13 to annual energy bills, according to an analysis by The Telegraph.