The Budget’s green dreams will leave us powerless

Sunday Telegraph   03 April 2011 

The Budget’s green dreams will leave us powerless

The Government's obsession with its babyish green dreamworld will force the closure of power stations, increase our electricity bills and damage vital industries, warns Christopher Booker

Dimming lights: George Osborne's new carbon tax will cost
us billions and hasten the arrival of blackouts and power cuts
By Christopher Booker

We are fast approaching that long overdue moment when the country wakes up to the scale of the disaster we are being led into by the absurdly unreal, global-warming-obsessed energy policy of our “greenest ever government”. Yet another disturbing instance of this was the announcement tucked away in George Osborne’s Budget that he will impose a “£16 a ton floor price for carbon”, a measure seemingly so arcane that no one has really bothered to spell out its implications.

What it means is that for every ton of CO2 emitted by British industry, and by our electricity companies in particular, we shall all indirectly have to pay what is in effect a hidden tax of £16, rising over the next nine years to £30.

Last year, the coal-fired power stations which supply nearly a third of our electricity used 40 million tons of coal, each emitting up to 2.9 tons of CO2. For this 116 million tons, we shall see nearly £2 billion added to our electricity bills.

The same tax on gas will add a further £1 billion to our bills, thus increasing them by a total of £3 billion a year, rising to £5 billion by 2020. This will add more than 25 per cent to the price we presently pay for electricity, or £200 a year for every household.

This is on top of the price we will have to pay for all the Government’s other “green” dreams, such as the £100 billion it wants spent on 10,000 giant wind turbines, plus another £40 billion to hook them up to the grid. The 100 per cent subsidies for onshore wind power and 200 per cent subsidies for offshore will add further billions to our bills, in return for what will still be only a fraction of the electricity we need.

Already we have seen one estimate, from analysts at Matrix Group, that Mr Osborne’s new “carbon tax” will so skew the economics of coal-fired electricity that four of our larger French- and Spanish-owned power stations at Kingsnorth, Didcot, Tilbury and Cockenzie will have to shut down by 2013, even earlier than their forced closure under the EU’s Large Combustion Plants Directive.

This will knock such a hole in our generating capacity that we can look forward to the first of those long-predicted power cuts and blackouts.

What has also shocked British industry is that we will be the only country in the world that has to pay this new tax, thus eroding our competitiveness still further. It is not only electricity which will take the brunt of the tax, but all major CO2 emitters, such as what remains of Britain’s steel industry.

Among those already hinting that Osborne’s tax could lead to plant closures and the loss of thousands of jobs have been Welsh MPs, conscious that one of South Wales’s biggest employers is Tata Steel, with 7,500 workers. Tata itself has warned that Osborne’s tax will cost its British operations £20 million a year by 2020, representing a “potentially severe blow to the sustainability of UK steelmaking”.

David Cameron’s response to this is that, on the contrary, he is “hugely heartened by the fact that Tata is putting more investment into the UK”. But what is the main proclaimed purpose of that investment? To make the blades for those useless windmills. Alas, Mr Cameron could not begin to understand what this tells us about the babyish little green dreamworld in which he and his Government live.