Posted by: @jeff

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Part is being done by shifting 75% of the cost of energy levies off bills and into general taxation. However this isnt recorded as a permanent switch in the actual budget documents interestingly. The budget document says 75% of Renew­able Obligations,  but it will be interesting to see if they actually only mean ROCs or something more including FIT etc. 

What is the Renew­able Obligations? Is that the roll out of turbines, solar, etc. to make the grid greener?

Posted by: @jeff

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Everything else being equal it will be roughly 3.3p reduction in the electricity unit rate and 0.3p reduction in the gas (pre VAT). Gas is going down as the ECO scheme is split across gas and electric currently. Also import that this is on the price cap rather than other tariffs, so the change will undoubtedly vary by tariff.... 

Will this be partially offset with the pre-budget announcement that things like Sizewell-C payments will be added to the tariff? 

Posted by: @editor

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What is the Renew­able Obligations?

This was the original form of subsidy for renewables that ran from 2002-2017, it's much more generous than CfD (because renewables were much more expensive and the massive fall in costs wasn't certain) which has been the replacement since then.  RO is index linked, but it's predicted that the early contracts will begin expiry in 2027, so the total RO costs will begin to fall then naturally.  RO is the single largest subsidy for renewables and is all on electricity bills today.

Posted by: @editor

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Posted by: @jeff

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Part is being done by shifting 75% of the cost of energy levies off bills and into general taxation. However this isnt recorded as a permanent switch in the actual budget documents interestingly. The budget document says 75% of Renew­able Obligations,  but it will be interesting to see if they actually only mean ROCs or something more including FIT etc. 

What is the Renew­able Obligations? Is that the roll out of turbines, solar, etc. to make the grid greener?

Posted by: @jeff

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Everything else being equal it will be roughly 3.3p reduction in the electricity unit rate and 0.3p reduction in the gas (pre VAT). Gas is going down as the ECO scheme is split across gas and electric currently. Also import that this is on the price cap rather than other tariffs, so the change will undoubtedly vary by tariff.... 

Will this be partially offset with the pre-budget announcement that things like Sizewell-C payments will be added to the tariff? 

The Renewal Obligation is the early subsidy that was given to wind, solar, burning rubbish etc. It was for 20 years and gradually finishes between 2027 and 2037. You may have heard of Renew­able Obligation Certificates ROCs. That is this line item. 

We talked about them recently when we talked about the separate FIT subsidy. There are consultations out to change the indexation from RPI to CPI to reduce costs. 

ROCs were replaced with CfD. 

Many of these old sites with ROCs are expected to be repowered with new equipment under the CfD scheme. ROCs were more generous overall than CfD. CfD is also on our electricity unit rate but not classed as a levy. So although ROCs will gradually disappear they will be replaced by a lower subsidy over time. No one is willing to build anything without a subsidy of some sort the moment. CfD isn't positioned as a subsidy, it is a guaranteed price for electricity, even electricity that isn't used. 

As for the savings in April, yes any savings are offset by the other costs being added to our bills so the net savings may be lower depending on what happens with gas wholesale prices and what changes are made in the Warm Home Plan etc and as you say nuclear costs. 

@Jeff, how much other "fat" is loaded into the tariff... I find the subject fascinating.

@editor - it depends on what you count as 'fat' !

What about the £10's of millions taken by Ofgem and NESO to create and enforce 'Governance' for the energy sector?

The DNOs, NGET etc are heavily invested in engineers who actually do the required work.
But NESO, and even more-so Ofgem, are primarily people who create strategies and programs.
They issue consultations, collate the responses, and issue reports.

That's a very expensive management operation.
If it were to occur in industry, then the imbalance of management and workers would cause the business to collapse.

Unlike DESNZ, Ofgem & NESO are very difficult to hold to account.
They are heavily involved in self-preservation, but aren't liable to the same oversight as the civil service.