Linking offshore wind farms to grid will cost £17bn

Fears that development costs could lead to higher prices for consumers

Plans to link offshore wind farms to the grid may result in higher electricity prices for consumers, it has been warned by a committee of MPs.

The method of bringing power from offshore wind farms, and onshore ones, to land is very complex and has been a major obstacle in the development and expansion of the wind energy industry, as a heavy-duty transmission infrastructure has to be developed, which has left many wind farms waiting for long periods to be connected to the grid.

Currently, a licensing system is in place which allows transmission lines to be constructed by the National Grid and other developers, who are then given a guaranteed income for 20 years; a total cost of £17bn. However, companies can only be fined 10% of their income if they fail to meet obligations, which Margaret Hodge, the chair of the public accounts committee, fears will lead to higher prices for consumers. She said, ‘Not only is it unlikely that this licensing system for bringing electricity from offshore wind farms on to the national grid will deliver any savings for consumers, it could well lead to higher prices. Indeed the terms of the licences appear to have been designed almost entirely to attract investors at the expense of securing a good deal for consumers’.

Offshore wind farms seem to be a good source of energy, but getting to use this energy is costly

(Image source - The Guardian)

Ofgem, the energy regulator, responded to the MPs report by highlighting the fact that it was only able to cover the first four tenders for licences, and added that the competition for these licences had saved customers about £290m. They said: ‘Our objective is to ensure this necessary investment is delivered at a fair price. As with any new market, there are lessons from early transactions. The initial tenders were conducted under interim arrangements. "It has always been Ofgem's intent to refine the tender process to deliver greater efficiencies and further benefits to consumers’.

As has been said before, new forms of energy production will, in the short term, lead to higher bills to cover the costs of implementing these new initiatives, though it is expected that these renewable forms of energy production will lead to cheaper bills in the future. But what do you think? Are you willing to pay more now for cheaper bills later? Let us know your views in the comments below.

Are politicians really that out of touch with the public?

MPs calling for higher wages despite millions struggling with low pay and rising energy bills

Earlier this week, the results of a survey of 100 MPs were released, showing that 69% thought that their annual wage of £65,738 made them ‘under-paid’, with the majority of them suggesting that their wage should be at least £96,740.

Considering the expenses scandals of recent years, and the fact that millions of people are struggling to afford things like food, housing, energy bills and general living costs, the news that MPs think they are hard done by is just astonishing. It’s not just because of things like their second homes, their expenses and questions about how much they actually do (apart from major events, how often is Parliament completely full?), but because of the simple fact that so many ordinary, hard-working people are having to face higher living costs without any wage increases and are being told by these very MPs that they’ll have to just put up with it because of the UK’s economic situation.

Despite millions of people struggling with living costs, MPs also think they have it rough

These opinions aren’t just held by one party however. 47% of Conservative MPs and 39% of Labour MPs felt they were unpaid. Only 9% of Lib Dems held this view, but they thought that the ideal wage for a politician was around £78,000. Dave Prentis, the general secretary of Unison, Britain’s largest public sector trade union, said ‘The idea MPs believe they deserve a 32 per cent increase is living in cloud cuckoo land’.  Matthew Sinclair, of the TaxPayers’ Alliance, agreed, saying, ‘Hiking politicians’ wages at a time of pay freezes, benefit caps and necessary spending cuts would be completely unpalatable to taxpayers.

Some MPs have tried to defend their responses, as one wrote in the anonymous comments of the survey that people have ‘no idea’ of ‘the pressure, breadth of knowledge and social skills that are required to do the job’.  If MPs feel they are unpaid, how do they think they rest of the country feels? Didn’t they think about the reaction of the public to their survey responses? Do MPs seriously believe a family struggling to make ends meet, who are have to face turning off their heating to afford to eat, or a graduate who can’t get a job despite having a first-class degree, would think ‘You’re right, £65,000 isn’t anywhere near enough for a politician’?

A lot of MPs seriously seem to have no idea what everyday life is like for a lot of people in Britain, and the results of this survey just show how out of touch they are with the British public by not seeing the irony of telling people to accept pay freezes, lower wages and higher energy bills whilst demanding higher pay for themselves.