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Get rid of green levies to support energy suppliers and cut energy bills says E.on boss

Richard Simmonds • Sep 17, 2021

The boss of E.On has called for the government to scrap renewable energy levies to help cut rising energy bills as the nation heads struggles with record high wholesale costs.

'Fund green subsidies through taxation'

In an interview with the Financial Times, E.on boss Michael Lewis said that green subsidies should be funded through taxation rather than energy suppliers. Such a move would allow companies to cut energy bills and support millions of households already struggling to make payments.


With wholesale energy prices at record highs warnings have been made that energy bills will rocket over the coming months and many smaller energy suppliers are at risk of going bust.


“This is going to be a very challenging winter for customers and for suppliers and there is a real short-term imperative to do what we can to help consumers. Green levies and subsidies should be paid for through general taxation so these costs are funded more progressively and we level the playing field on the cost of cleaner heating. Then we can also start to apply something like a carbon tax on gas on a ‘polluter pay’ principle,” said Lewis.


The energy price cap has also come under scrutiny by the industry with several experts blaming it and business models for the predicament many suppliers now find themselves in.


A combination of trying to undercut the market by offering lower tariffs than the competition has come back to haunt suppliers using such a tactic as now thanks to the price cap they are unable to raise energy bills enough to cover their losses.


Currently, green levies account for around a quarter of energy bills.


Also read: Wholesale Energy Prices, Bad Debt and the Price Cap are proving detrimental to Energy Suppliers


Wholesale prices to remain high as crisis begins to bite

The high wholesale prices are beginning to impact the wider economy after it was revealed that they have forced the closure of two fertiliser plants in the north of England impacting 600 workers.


The UK steel industry has also come under immense pressure with steelmakers reportedly forced to pause work during peak electricity demand hours due to the price of energy.


The energy price shock has caused industry bodies to call on the government to take more action to protect households and companies. Some are warning that heavy industry may be forced to cease operating during the winter especially if it is a particularly cold one that will see a surge of demand for heating.


Commodity trader, Goldman Sachs has warned that the soaring prices could result in blackouts across Europe.


In the UK electricity bills are now the most expensive in Europe due to the nation’s high dependency on gas and renewables.


A fire at a major UK electricity interconnector saw a further jump in prices. The blaze combines with the closure of another interconnector for maintenance with supplies not expected to return to full capacity until March next year at the earliest.


As a result of the fire electricity prices for the following day leapt 19% to £475 MWh.


Also read: Energy Rationing Fears grow due to low UK gas reserves and Russian opportunism


Looking to enter the UK energy market? Dyball Associates team of energy market consultants can guide you through the steps to get qualified and attain your gas or electricity licence. 


Whether you’re looking for electricity and gas systems or support on 
starting an energy supply company, Dyball Associates can help. 


Further Reading

Utility Point exits the Energy Supply Market


Why SaaS is more important than ever for Energy Suppliers


What are the Digital Tools an Energy Supplier should use to attract more customers?


Dyball Associates are proud to help new supply businesses successfully launch in the UK market.

 

Through our energy market consultancy services, and the software we’ve developed, we’re supporting new UK electricity and gas suppliers to get set up and start supplying.

 

For more information on how to start and manage an energy company, get in touch with Dyball Associates today.


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