Forum Topic

Do you care about the environment?

The PM says he wants to see 600,000 heat pumps installed each year by 2028. Yet there is a 23% "environmental levy" on electricity, but less than 2% levy on gas. This historical anomaly is preventing the installation of low carbon heating using heat pumps.If you agree this is needs to be corrected then please vote for the new petition at: https://petition.parliament.uk/petitions/588159

Edward Thompson ● 1975d36 Comments

You may also want to send a brief note tofleur.anderson.mp@parliament.ukThe "environmental levies" were introduced nearly 20 years ago when electricity was largely generated by burning coal and the CO2 from coal combustion was attributed to the electricity.  With the phasing out of caol power stations electricity is now cleaner than burning gas.  Therefore it is time for the levy to be lifted to allow us to use heat pumps (which can use 1 kW of electricity to transfer 3 kWs of heat into your house).

Edward Thompson ● 1975d

There is also an anomaly in that VAT is chargeable on refurbishing homes whereas newbuild is VAT free.

Philippa Bond ● 1975d

To Philippa: That is correct and this affects the cost of vat on an installation.  The vat cost is not charged on a new build.The environmental levies are on use of electricity and add 23% to the running cost of the electicity for a heat pump, but only less than 2% on the gas for the running cost of the gas.

Edward Thompson ● 1975d

Or will just lowering the tax just make it cheaper to charge top end electric cars?This is why some joined up policies are needed - otherwise  taxation becomes more regressive.

Ed Robinson ● 1974d

Removing the large out-dated tax on electicity would encourge people to use electric cars too.They would stop burning more petrol - which would be good for all of us.We do need joined up tax policy - not high taxes on electricity which are preventing the electrification of heating and the electrification of transport.I encourage you to vote for Clean Air and reduced CO2 emissions  - if you care about the future of the planet.

Edward Thompson ● 1974d

Edward, it's all very well going on and on, but the sea is full of wind farms, that I think are really ugly. There are not enough charging points for vehicles in residential roads. It's no good saying there will be, when there isn't, when you expect people to all buy electric vehicles. The car in my mind isn't really electric, is battery operated, with thousands of AA batteries, all these batteries when their life has run out will all have to be disposed of somewhere. More muck for the planet.

Barbara Stevens ● 1974d

Edward, putting aside the regressive tax argument which us as a country and society we need to have (if only we had an opposition party), if you look at the cost and then compare that to the proportion that will go on heat pump running costs the figures do not add up.Also heat pumps can be used for cooling too. Should we encourage those running costs???Changing the proposal to a general switch away from gas to electricity is a different proposition but we are still using gas for generating electricity. I would need to look into that.But quite agree we should challenge the current situation.

Ed Robinson ● 1974d

Signed. Thank you for drawing attention to this issue

Jane Carter ● 1974d

You think an offshore windfarm is uglier than an onshore power station?

Matt Palmer ● 1974d

Windfarms: It may be worth writing to the Queen 😀😃🙂https://www.theguardian.com/business/2021/feb/08/queens-treasury-windfarm-bp-offshore-seabed-rights

Ed Robinson ● 1974d

If it's accepted that we need to shift consumers from hydrocarbons to electricity (whether that be in homes or vehicles) then it seems sensible to rebalance the levies, taxes, etc to encourage (nudge?) them to do that. However, if one looks at the recent Swiss referendum then perhaps better information, education, etc is needed to accompany any financial inducements? It's also difficult to convince people that action needs to start NOW even though this is just the beginning of a long term programme over a number of decades. (Perhaps not enough people understand the planning and dependencies in such a long term programme - I've seen a two year IT project fail because not enough poeople who should have known better did not understand that! Also, there's always the danger of some populist movement championing a backlash against the necessary measures to curtail climate change.)With regards to generation of electricity using gas, this needs to be addressed but is less of an issue than consumer gas burning as the greenhouse gases produced by generation can be better managed using techniques such as carbon capture.Personal opinion but I'd say wind farms are more pleasantly to look at than oils platforms and rigs, and although perhaps they don't have the same futuristic looks as nuclear power stations they're less dangerous and easier to manage Petition signed.

Michael Ixer ● 1974d

Jane can you put into detail what you have signed for, obviously in your words, as I'm sure it will not be technical.

Barbara Stevens ● 1974d

Petition:Remove environmental taxes from electricity to allow heat pump installationsExplanation:Around 23% of electricity bills are made up of environmental and social levies, while these levies make up just 2% of gas bills.These taxes are a significant barrier to the decarbonisation of heat in the UK, and encourage further burning of fossil fuels.The Government needs to eliminate environmental levies on electricity to encourage people to install heat pumps without the disincentive of such high costs, to help fight climate change.It is impossible for the UK to even begin to achieve the Prime Minister's aim of 600,000 heat pump installations a year by 2028 until it eliminates the taxes on electricity that are discouraging heat pump installations.

Edward Thompson ● 1974d

You have to be careful what you wish for.Another way to make electricity as cheap as gas is to increase the environmental and social levies on gas.I can understand the general reason to decrease the levy but the petition does not make it clear why it applied to heat pumps when even with the levy the running costs of heat pumps are around half that of gas??Michael the carbon capture sounds good but does it actually exist today?With Gas being used for approximately 37% of the UK’s electricity - it is beginning to look like a shaky proposal to me and perhaps the opposite of the headline in the title.

Ed Robinson ● 1973d

Ed. I explicitly used the term rebalancing in my posting! We may have to accept that in the future energy will cost more - even if it's clean. For example the technologies exist for carbon capture (when I was developing a data collection system for a North Sea oil platform in the '70s gas was being reinjected back into oil fields then to avoid flaring gas, or perhaps its introduction was being discussed - it was a while ago) but I'm not sure to what extent it's been implemented in power stations but as I understand it it's feasible at a cost. As I noted we are looking at a programme over several decades, as well as time there will also be costs. If the government goes for nuclear generated electricity don't expect chgeap energy!To be honest, forget our own energy costs, I expect the bigger cost will be providing aid to developing countries that cannot afford their own sustainable energy sources.https://en.wikipedia.org/wiki/Carbon_capture_and_storage
https://www.aramco.com/en/making-a-difference/planet/carbon-capture-utilization-and-storage

Michael Ixer ● 1973d

Perhaps this is an observation of rather than a proven change but never the less something that should concern us? Loss of ice has a cascading effect (less reflection of heat from the sun, rising sea water levels, release of trapped greenhouse gases, etc)https://www.democracynow.org/2021/6/16/headlines/arctic_scientists_say_we_may_have_already_passed_climate_tipping_point

Michael Ixer ● 1973d

I thought I read that these levies were just on commercial rather than domestic electricity?  The reason they are there are to discourage the use of electricity or rather to encourage us to be more careful in the use of it.  Don't commercial buildings have to audit their energy use? 

Philippa Bond ● 1973d

Philippa - these "environmental levies" are on commercial electricity And on domestic electricity.There is a 23% levy on domestic electricity - so 4.76 pence of levy is included in the cost of a unit of electricity of 17.20 pence (average price).There is less than 2% levy on domestic gas - so 0.25 pence of levy is included in the cost of a unit of gas of 3.8 pence.So you pay more tax on one kW/hr of electricity than the total cost of a kW/hr of gas.These high levies on electricity are discouraging those who might want to install a heat pump from doing so.Very few people know these facts.  Please encourage your friends to sign the petition at:https://petition.parliament.uk/petitions/588159There are 2 reasons to sign:  first to get the illogical levey removed;  second to let people know  that Treasury is preventing people from install heat pumps at the same time as the PM is encouraging people to do so.

Edward Thompson ● 1973d

Edward is there somewhere online that it says its also on domestic? Not saying I don't believe you at all but all i can find are references to non-domestic, like at the link belowhttps://www.gov.uk/government/publications/changes-to-rates-for-the-climate-change-levy-for-2022-to-2023-and-2023-to-2024/changes-to-rates-for-the-climate-change-levy-for-2022-to-2023-and-2023-to-2024

Matt Palmer ● 1973d

Thanks, Matt. Good spot, it would seem from this Wiki piece that domestic - and transport - users are excluded from the Climate Change Levy. It would seem more sensible for electricity to charge the levy on the generator and only for those that produce greenhouse gases; that is, not renewables or nuclear? Obviously, with regard to transport, there's also fuel tax. Looking at this and the various rates it all seems disjointed - more of a revenue generating exercise than a serious strategy to nudge people awast from carbon to renewables? But perhaps I'm missing something? https://en.wikipedia.org/wiki/Climate_Change_Levy

Michael Ixer ● 1973d

Matt: Yes, these taxes are a surprise to most people.Please see:https://www.ofgem.gov.uk/data-portal/breakdown-electricity-bill https://www.ofgem.gov.uk/data-portal/breakdown-gas-billIf you look at these links you will see a chart.  You then need to click on "Data Table" to get the underlying figures. You will see the "Environmental and social obligation" costs. And also the VAT cost which is extra on top. In short it would be economic from the country's point of view for you to invest in a heat pump, but it would not be economic for you to invest (because of the huge tax burden imposed on you for doing the right thing!).Remember to tell others if you are surprised.Remember to vote!346 people have already done so since Tuesday.

Edward Thompson ● 1973d

Edward you keep making the claim below but is there any evidence that removing the levy will lead to increase up take? Ignoring VAT and assuming level with gas it will be less than 17% reduction.The payback period will be reduced slightly but the real issue is the installation costs/requirements.A much simpler solution and more targeted would be to remove the VAT on them. It will reduce the payback quicker."These high levies on electricity are discouraging those who might want to install a heat pump from doing so."

Ed Robinson ● 1973d

Removing the 23% levy on electricity would reduce the running cost by 23%.Evidence?  The price of electricity is low in Sweden (because of low taxes) and the price of gas is high (because of high tax on gas) in Sweden.  A man in Sweden is 35 times more likely to buy a heat pump than an Englishman.VAT is an additional barrier in the UK. Vat is at 20% on the installation or maintenance of a heat pump.  But, incredibly, Vat is only 5% on the installation or mainenance of a gas boiler (even if you are a millionaire). Do you care about the environment?

Edward Thompson ● 1973d

Hi Edward,Not quite true regarding the percentage but let's leave the calculation and the Swedish population density etc.Swedish electricity is 96% CO2 free but that is not true in the UK. If it was then it would make sense.

Ed Robinson ● 1973d

Some more information here:https://www.dyballassociates.co.uk/energy-suppliers-call-for-changes-to-electricity-and-gas-leviesLooks like the social and environmental charges on domestic bills aren't the CCL but made up of other tariffs, charges, etc.As I said very disjointed and confusing. I cant see any reason for the imbalance in this way when it's use of gas that should be discouraged, although a gradual shift is probably needed to avoid disadvantaging gas users on low incomes - or grants to shift to electric heating?

Michael Ixer ● 1973d

Not many people have gas in North Sweden anyway. Because my son lives there.

Barbara Stevens ● 1973d

We really need an immediate rebalancing, not just a gradual shift.The government should send a clear signal that burning fuel and releasing CO2 (and NO2) is no longer appropriate.It is true that 83% of households would spend more on gas (encouraging them to spend a little less). Remember that 100% of households would have a reduced electricity bill.Fuel poverty is a big concern. Those who are currently in the weakest position of all are those who are reliant on direct electric heating. Let's help them by removing the inappropriate levies on electricity.

Edward Thompson ● 1973d

seems a bit harsh to blame your son, surely there are other reasons?

Matt Palmer ● 1973d

Get the joke Matt, I asked him. Got loads of midges around the lakes, they love a good bite. Think he's had enough out there now.

Barbara Stevens ● 1972d

They have a lot of wooden houses in Sweden and a lot of triple glazing.  They seem to have managed to insulate their homes so much better than we can with ours with our mix of materials eg brick and stone and wood which seem to be so much more difficult.  There can be a problem when one surface is warmer than another causing condensation on wooden elements such as joists which then rot - so a great deal of thought and care is needed. There is a listed house in Clapham where a lot of different methods of insulation are being used and which has been in the magazines. We still need to retrofit our homes so that we don't need to use so much electricity in the first place for heating and cooling them.  Remember too that a lot of the new homes being built suffer from being too hot in heat waves because small flats in blocks are unable to use the old low-tech solution of allowing through draughts and windows may only open a very little for safety reasons - and people then just reach for electric fans.

Philippa Bond ● 1972d

The evidence that action is needed is building up:https://www.theguardian.com/science/2021/jun/17/earth-trapping-heat-study-nasa-noaaOf course, going back to the original point of rebalancing taxes and levies between geas and electricity, immediate action might bve desirable but I'd see two drawbacks: firstly, it could lead to a backlash by consumers and situations like the Swiss referendum where voters rejected climate change measures or, secondly, if everyone were to rush to switch from gas to electricity then it's unlikely the supply infrastructure could cope with it. Hence, it has to he a planned programme of adjustment. If we've started too late perhaps we have to live with the consequences?  

Michael Ixer ● 1972d

New builds should be required to use district and communal heating systems.Where possible existing properties should be switched over to the same.Individual heat pumps may be suitable for large or isolated properties but I'm not convinced for cities iys the way to go for most households.

Ed Robinson ● 1972d

Ed: you say you are not convinced about heat pumps.See the view of the Climate Change Committee:Our Balanced Net Zero Pathway reflects four priorities over the coming decade or so:•Deliver on the Government’s energy efficiency plans to upgrade all buildings to EPC C over the next 10-15 years.•Scale up the market for heat pumps as a critical technology for decarbonising space heating, while maintaining quality. •Expand the rollout of low-carbon heat networks in heat dense areas like cities, using anchor loads such as hospitals and schools. Prepare to shift away from using fossil fuel Combined Heat and Power (CHP) as a supply-source towards low-carbonand waste heat by preference from the mid-2020s.•Prepare for a potential role for hydrogen in heat through a set of trials building on the current innovation programme.

Edward Thompson ● 1972d

Edward what I'm saying is that heat pumps for individual (unless large or remote) properties is not going to deliver the big CO2 savings even if you reduce the levy.Communal & district heating will deliver and heat pumps will play a large part in that.

Ed Robinson ● 1972d

Govt also expects the big energy companies to fit smart meters in all homes.  I think about half of UK homes now have them.  The big companies seem to also provide some free insulation - mostly to those on benefits.The Green Deal having been pulled from being available to everybody has now been redirected to be used for the most needy by Councils and Green Doctors seem to be working on on this.  Grants come and go.  There were reports that there weren't enough contractors able to take on the implementation of the installation of these heat pumps (there are air source and ground heat pumps). Air source are easier, ground source you need to be able to get access to the garden which for a lot of terraced houses is impossible. There has been a suggestion that ground source heat pumps should be installed in parks.Still not a lot of point in doing all that heating and cooling if it is all going to leak out of our houses.  Is there a thermal image camera you can get to fit on an i-phone? Nuclear Fusion is in the news today with a building to be built to work on that in Oxfordshire.

Philippa Bond ● 1971d

https://cat.org.uk/cat-at-home/webinars/?date=2021-06-01&view=grid&type=All&category=All

Philippa Bond ● 1967d