Energy Costs - A Holywell Town Council Working Group Investigation

Are energy increases full justified?

Gas and electricity prices have rocketed and will rise again later this year. A working group at Holywell
Council consisting of Cllr *********, Cllr ************ and Cllr *********** has been looking into
whether prices increases are wholly justified, given that it’s the wholesale price of gas causing the
increased cost of gas and electricity in domestic billing. Although wholesale gas price rises pre-date
the Russian Invasion of Ukraine, it’s Russian gas that’s driven the market price. Let’s look at how that
effects UK consumers. UK is only 15% reliant on Russian gas compared to France at 24% Germany at
47% and some countries 100% reliant. You might think that prices rises should only apply to that 15%
of our usage but no, other providers of gas (Shell and BP included) increase their prices according to
supply and demand, the market price. Whether that’s fair given the post Brexit post Covid difficulties,
BPs 189 billion profit and Shells quadrupled profits driven by these increases is arguable. Of course
some electricity is generated by fossil fuelled plants but according to statistics, renewable energy
provides up to 40% of our needs. Several energy providers claim on their web sites that they supply
us with 100% renewable energy, we then have to ask how gas prices affect that renewable energy?
The short answer is, it doesn’t. Applying price increases to renewable energy based on wholesale gas
prices is unjustified. Let’s estimate what affect gas prices realistically has on our energy bills. Of 100%
demand, 15% is reliant on Russian Gas. Of the remaining 85%, 40% is from renewable sources leaving
45% reliant on a number of other sources which includes gas. it follows that the across the board price
increase of 50% and rising, should actually affect only 45% of our energy bill, equating to around 22.5%
overall not the 50% forced upon us. Clearly government favour oil and gas company profits to
consumers and it not difficult to understand why. Shell quadruples its profits, government benefit
from tax revenue. BP post profits of 189 billion, government benefit from tax revenue. Investors in
Shell, BP and similar providers rake in dividends, government benefit from tax revenue. Energy
retailers, contractors and logistics companies that bring energy to your door also pay tax and
ultimately the consumers buy the end product paying VAT and a green tax. Green tax on renewable
energy that’s already 100% green !! On each price rise VAT revenue rises accordingly and government
win on each flip of the card. What a fantastic way to manage the post Brexit post Covid recovery while
being able to point the finger elsewhere for tax rises. Forcing a loan on consumers, whether or not
they want it, also questionable. There is no choice to opt out of accepting increased standing charges
to repay a loan you may not want. That unnecessary loan only protects a base line income for energy
providers as oil and gas gives way to renewable year on year. A full report can be obtained via the link provided (only accessible via a Google account currently).