Fuel poverty is excpected to hit 10 million UK households by 2016
It’s one of the first questions many people ask when they hear that a wind turbine is being put up near them; “Will I get cheap energy?”
The answer, finally, may be yes. For now, however, you’ll need to move to Cornwall to qualify. In a Goliath-style challenge to the Big Six, the small renewable energy company Good Energy earlier this week announced a lower tariff for people who live within two kilometres of their Delabole wind farm.
The tariff will save users about £110, and they will also receive a windfall of £50 for every year that the windfarm’s production levels exceed expectations. Good Energy hopes to roll it out in other parts of the country if it works out.
Price rises well above inflation rates from the big six energy companies have made energy prices a hot political topic this year. Last week SSE announced a rise in profits of almost 40%, just a few weeks after announcing a price rise of 9%.
Fuel poverty – where energy bills eat up more than 10% of household expenditure – is predicted by government research to hit nearly 10 million by 2016. The conservatives are particularly sensitive to these issues after a blunder by the Prime Minister in the House of Commons a couple of weeks ago, when he wrongly announced that the upcoming energy bill would force energy companies to offer customers the lowest available tariff. The department of energy and climate change (DECC) has been trying to explain his statement away ever since.
The tariff however is also aimed at the problem of community attitudes to onshore windfarms. Research has repeatedly shown that if communities were seeing any financial advantage from having a power station nearby, acceptance would be easier. Onshore wind is proving to be one of the most divisive issues for the coalition government, but DECC has signaled support for community schemes.
Good Energy’s tariff, however, is a step beyond anything suggested by the government. “We’ve been thinking about how to do this for a couple of years now, after we did some big consultations in 2010,” says GE chief executive Juliet Davenport. “When you sit down and talk to people one of the things they always want to know is Can I get cheap energy?”
Good Energy will finance its tariff through some small saving measures, such as using an uncertified tariff rather than a certified one. “There are also very small benefits we get if we supply locally because you reduce the losses in the system,” explains Davenport. “And we’re using part of the profit from the wind farm, about £25K which will also go to support the tariff. If it’s a windfall year, the extra cost will probably be about £5-10 thousand on top.”
She admits she is now hoping the Big Six will take up the idea. “What’s in it for them? Well, goodwill for a start, and then they might pick up a few more customers and hold onto existing ones.”
Does she think they’ll take up the challenge?
Bibi van der Zee is the Ecologist’s political correspondent