Centrica’s latest spin still doesn’t address the real issues

Posted by petespeller - 4 May 2012 at 6:04pm - Comments

by-nc. Credit: David Sandison / Greenpeace

World's biggest energy bill blocks the entrace to Centrica's HQ

Since we shut down their head office on Monday, British Gas owner Centrica have replied to the thousands of people who emailed them about their overreliance on gas, their lack of investment in renewables and their failure to bring energy bills under control. But whilst they talk a good game, their spin fails to address the real issues.

Firstly, they claimed evidence from a report by Bloomberg New Energy Finance that they have installed less renewable energy than any of the other big six energy companies was misleading. This is simply wrong. The report looked at every major renewable energy project the big utilities built since 2006 and British Gas had built the least. No excuses.

The report was written by one of the foremost energy consultancies in the world, it would be interesting to know what they had to say about Centrica’s attacks on their research.

Centrica claimed that going back to 2008 the rate of increase in energy bills has only been 2-3% per year. Again, this is misleading. In the last year, expensive, imported gas has pushed up the cost far more sharply. Figures from energy regulator Ofgem show the cost of heat and electricity has risen by 12.8% from March 2011 to March 2012. The mild winter cushioned some British Gas customer’s from the impact this winter, but boss Sam Laidlaw admits gas prices are set to keep rising.

They claimed to have "re-invested £1.50 for every £1 in profit". This is a fudge of the numbers. What they mean is that they managed to raise and invest £1.50 for every £1 in profit. Their shareholders would be rather annoyed if they were re-investing more profit than they were making. As it stands, they pay out 74% of their profits to shareholders, more than any of the other “big six” energy companies.

Centrica are dodging and weaving their way out of accepting the simple truth; that their reliance on expensive and imported gas is keeping households tied to volatile prices.

The upcoming Energy Bill will decide the future of energy generation for the UK. That future must be clean, affordable energy to stabilise bills and tackle climate change. As the UK’s largest domestic supplier of energy, Centrica must publicly declare support for prioritising renewable energy in the Bill and reduce our reliance on expensive, imported gas.

Far from taking part in an honest discussion, Centrica have dodged our central ask to champion a clean energy future that puts renewables and efficiency at its heart and brings bills under control.

Read the full correspondence between us and Centrica here and here.

Article tagged as: british gas, centrica, climate change, energy bills, gas, renewable energy

Comments Commenting is now closed

Mr Speller

Your attack on Centrican appears confused. Presumably you understand that renewable energy sources are more expensive than gas? Lobbying Centrica to build more renewables is fine, but claiming this will reduce energy bills is incoherent. The cheapest energy available is from gas-fired powerstations. Telling people that building renewable capacity will lower their energy bills is to spread misinformation, surely?

Am I missing something?

Best regards

Peter Baker

www.thejollypilgrim.org

By Peter Baker - 4 May 2012 at 11:54pm

I think the crux of the issue is that the Big 6 Energy companies are lobbying government, and spreading disinformation in the media, i.e. that renewables are the cause of high gas bills, when the real reason is the increasing price of gas, and the profiteering by those energy companies.

There's nothing in the above post to suggest Greenpeace is telling people that building renewables will necessarily lower bills, the point is simply that investing in new gas power stations will inevitably lead to increasing bills, especially when the energy companies are allowed to price hike to massage their profits to obscene levels.

By Alex Morgan - 5 May 2012 at 8:48am

To Peter Baker's point, taking a long term view, renewables will eventually become cheaper than gas and other fossil fuels. Fossil fuels are getting more expensive to locate and extract. Also as commodities become scarce you tend to get much greater volatility in their price, so fuel bills are likely to become increasingly volatile as supplies become harder to get at.

So on the one hand we have fossil fuel prices rising inexorably, and on the other we have a renewables industry which has yet to reap the benefits of economies of scale. For technologies like solar it's not unreasonable to expect that the technology will become more efficient in kWh/£ terms too as a larger markets support more R&D and improve long term energy storage (one of the problems with many renewables at the moment). Note also, that solar and to a lesser extent wind have the advantage that it can generate power nearer where it's used. Power transmission tends to lose about 10% of the energy, so local generation has an advantage, and this bodes well for solar and much wind.

In the short term then, no renewables will not lower bills. But in the long term they most certainly will. Where the cut over will be is hard to say, I'm sure there are people here more able than I to give a judgement on that, but the gap is closing fast.

By Peter Bagnall - 5 May 2012 at 5:41pm

The Facts Of Life

Politicians need to remain in power to wield power...sorry represent me in Parliament

They therefore use our service personnel to go abroad and invade foreign sovereign states to effect regime change so they can renegotiate contracts for gas and oil

If we bite the bullet ...no pun intended...and ALL AGREE on a 10 - 15 year GB Plan then we can ween ourselves of gas and oil and gradually turn to "The Source of Power " for the next 200 years......Green Power

The UK must accept a reduction in the shorter term of our collective standard of living as The Banks used our monet to pay their CEOs big bonuses.

Anyone want to continue the debate.

By Longshanks - 5 May 2012 at 8:23pm

When I was a boy my father told me that when I grew up electricity (energy) would become free from a wonderful new power source that had been discovered. I was born in 1945 and youv'e probably guessed by now that new energy source my father talked about was nuclear. He, and many others, genuinely belived that nuclear was the worlds energy salvation. Here we are 60 years later, dad has sadly long gone and so has the myth of costly, polluting, nuclear. But the great thing is I can tell my grandchildren that same story knowing that renewables will indeed be free if not free then they should easily be cheap, plentiful and most importantly non-polluting and sustainable.

By Paul Maxey - 6 May 2012 at 8:51am

It's obvious that the initial cost of creating green energy sources will be high, just as it is to build a new coal powered gas station for example, therefore I believe that this argument is invalid. We need to be looking into the future, Centrica need to stop thinking about what will bring them profits now and focus on what will be best for everyone in years to come.

The more fossil fuels we use, the less are available - but the demand for energy doesn't decrease and therefore Green Power is the only option for a sustainable future with less Global Warming and cheaper bills for the public.

By accamera - 9 May 2012 at 7:50am

8000 British gas engineers rewarded with £10 per energy lead logged with customer whilst at there property, With customer being offered hundreds of pounds of there bills for switching. Yet the spin is always that the company makes little profit the sale of gas ?

By British gas engineer - 22 May 2012 at 9:37pm

PS engineer targeted with x 2 energy leads per week ? And if for one minute you think your job is not about sales than fcuk off managers quote at team briefing ..

By British gas engineer - 22 May 2012 at 9:43pm