Those paying the largest energy bills have the most to gain from a fast renewable energy rollout.
by Jay Richardson
Friday 10th December 2021
The point of this year’s Health and Social Care Bill is to make social care less financially onerous for individuals. Allegedly.
That would make a change. It also raises a question: if people are depleting too much of their own money to pay for social care (and more vulnerable people are depleting a higher proportion), what else can we do about it?
The data provides a clear answer. Building up renewable energy infrastructure over the next 10-20 years will decrease both volatility and overall prices on the electricity market, which will save money for the same people who bear the largest financial burden of social care and from fuel poverty.
Firstly, let’s look at the data on current social care costs and who’s paying for them. This graph shows the proportion of someone’s total savings that they would spend if they needed social care for 10 years; on the x axis is how much money they start with.
The difference between the current situation (blue line) and the new plans (green and orange lines) is stark, but the savings are also clearly greater for wealthier people.
Sonic data display emphasises a different problem. For each line on this graph, I’ve created a sonification (more about what that means on our about page). Here’s the sonification for the current system (the blue line).
(The amount of starting wealth increases over the timescale of the sonification, starting at £0 and ending at £500k. Starting wealth is also mapped to the modulation frequency or the speed of ‘wobble’: the faster the wobble, the greater the starting wealth. The individual’s spending is mapped to the pitch of the sound: the higher the pitch, the greater the percentage of their money an individual would have to spend.)
This helps emphasise two things that aren’t as obvious on the graph. Firstly, asset depletion rises very steeply at the lower end of the wealth scale, which you can hear as the pitch swoops upwards at the start. Secondly, the peak in asset depletion is quite long: the sound spends a good 3-4 seconds at a relatively high pitch before descending again, which means a large number of people are suffering relatively high asset depletion.
Here’s a sonification of the new plans, announced Thursday 18 November (the green line on the graph):
Again, you can really hear the high pitch sticking out there in the first two seconds of sound (meaning people who start with between £0-£200,000).
The most recent controversy around social care was about the gap between the orange and green lines on the graph. The Dilnot Commission, tasked by the incoming Cameron government in June 2010 to re-examine social care, proposed capping the money that someone would be asked to contribute to their own social care during their lifetime—a proposal that remains in the new plans.
However, in their original model, the lifetime cost cap is measured by the cost of care, including government contributions. Under the change announced on 18 November, only the personal contributions of individuals—not the means-tested contributions from local authorities—would count towards the cap. In other words, it’s now going to be “metered at spend” instead of “metered at cost”.
So, here’s the sonification of the original model.
There’s no noticeable peak in pitch here, but rather a plateau. Contrast it to the previous sonification, where the pitch hits a noticeable peak quite early on. It’s visible on the graph too, but I think in the sonification it stands out as the main difference between them.
So it’s pretty clear that people with less than the median amount of money are spending the highest proportion of it on their own social care under the current system. So far, so onerous (for individuals).
Next, let’s look at who is most likely to need this care. Here are a couple of tables from the latest Adult Social Care Activity and Finance Report from NHS England (2020-21).
Requests for social care support / number of people
|Age group||Requests for support per client||Requests per 100,000 in age category||Total requests|
|18 to 64||1.38||1,710||577,765|
|65 and over||1.57||12,815||1,337,875|
Gross Current Expenditure / £ thousands
|Age group||Long term care||Short term care|
|18 to 64||7,876,899||174,247|
|65 and over||7,748,385||506,861|
Spending between the two age categories is about the same, even though there are 3.2 times as many people in England aged 18-64 as there are aged 65 and above.
In other words, older people are the main service users of social care. That means they’re the most likely to be asked to contribute directly to their own costs, which the DHSC estimates at £683 per week. Which begs another question: what other things are older people disproportionately paying for?
Well, unsurprisingly in this more-than-usually cold and rainy country, one of those costs is energy and fuel.
If you press the play button just underneath the graph title, you’ll see that this is a remarkably consistent trend over the years—or at least over the four years of data that we have, from 2015 to 2019.
This sonification drives home the pace of cost increases after the age of the household reference person is over 49.
(Each successive collection of tones is the next oldest age group. The more distorted tone represents electricity spending, while the mellower tone represents gas. The higher the pitch of the note, the greater the household expenditure. There is also a semi-distorted tone representing the “other fuels” category, but the pitch is almost too low to be audible.)
The most obvious reason for this is that single-occupancy households will use almost four times as much electricity per person than multiple-occupancy households with children, and older people are more likely to live alone.
|Age group||Number of people living alone per 100,000|
|75 and over||41.04|
It’s worth noting that fuel poverty is itself a risk factor for ill health—which is obviously a major reason why people are likely to need social care in the first place—but that increasing homes’ energy efficiency is the most effective way of warming them up, so we’re not going into it here. If you’re interested, though, Public Health England did a comprehensive review in 2014 with the UCL Institute of Health Equity called Local action on health inequalities: Fuel poverty and cold home-related health problems.
So, we’ve seen that older people are more likely to need social care and more likely to have to pay for it—unsurprisingly. And despite spending more money on electricity per person, they are more likely to live in fuel poverty. That begs a final question: what’s the best way of lowering their electricity prices?
To find out, let’s look at the projected costs of each major electricity-generating technology.
In short, the costs of producing gas-fired electricity are set to increase by 47% between 2025 and 2040, while those for offshore wind decrease by 30%. The increase in the former will mostly be driven by higher carbon prices in the UK Emissions Trading Scheme, as you can see from how prices for the same technology with carbon capture and storage stay roughly the same.
Sonification emphasises the other major trend.
Renewables on the graph look like they’re only getting marginally cheaper, but in the sonification, their price decreases are quite noticeable: with some energy sources increasing in price and others decreasing, you can really hear the gap beginning to yawn. The whole almost sounds like a Zimmer/Nolan-style shepherd tone. It’s beginning to look like building more renewables would lower electricity prices in the long run.
Renewables do have higher costs associated with power variability (Balancing Services Use of System charges, which in the UK are levied on generators by the National Grid), which aren’t captured in levelised costs. But you can account for most of those complications by looking at how much money the renewables providers want from their buyers. And in 2019, the Dogger Bank offshore wind projects in the North Sea generated headlines by clearing a government-backed auction at just £39.65/MWh.
The mean wholesale electricity price from June 2010 to December 2019 was a full £6.74 higher than that, at £46.39 (with a standard deviation of £7.33).
In fact, this graph shows that it’s not unheard of for wholesale electricity to cost £60/MWh or more, aside from the recent gas supply crisis.
Just to press home how completely bananas the recent price hike due to fossil gas supply shortages has been, take a listen to this sonification: each 0.2 seconds of sound represents one month, with the wholesale price simply mapped to the pitch of the sound. The ending is pretty good.
Even more remarkably, that £39.65/MWh figure for the Dogger Bank offshore wind farm represents the full lifetime costs of the project—including planning, construction, operation, maintenance and decommissioning. And it’s comparable to the production cost of power from natural gas. In other words, we can now build and run offshore wind farms for less than the ongoing running costs of gas power plants.
Estimated production costs based on wholesale prices and spark and dark spreads (profit margins for fossil gas and coal electricity generation)
|Spark (fossil gas), low efficiency||Spark||Spark, high efficiency||Dark (coal)|
And yet, the UK is now generating more than 40% of its electricity by burning fossil gas.
I find that great big yellow area startling. Since the late nineties—a time of innocence, of Westlife’s first album, of the GammaFax, of Clueless and 10 Things I Hate About You—the UK has not decreased the proportion of fossil gas in its energy mix. We’re supplied by a greater proportion of fossil gas now than when the Spice Girls’ Forever came out.
Sonification brings out something different: variability. Sonifying the coal supply percentage first, you can immediately hear how it peaks in the winter, when electricity demand is at its highest and solar generation is at its lowest. I’ve added clicks for the x axis at a rate of 1 click per year (each click is on Q1).
You can also hear how drastically the coal production share fell between 2015 and 2017. In contrast to that, here’s the same sonification for gas-based production.
What’s very obvious here, and not so much on the graph, is that gas-fired production fell dramatically between Q2 2010 and Q1 2014—and then stabilised and recovered slightly. Even post-Paris Agreement, we have made no noticeable progress on reducing our fossil gas dependency.
Finally, wind and solar.
The eye-catching part of the graph for wind and solar is the end, but what catches my ear here is just how long it takes to get going. Nothing noticeable happens between 1998 and 2008. Remember that North Hoyle, the UK’s first commercial offshore wind farm, started generating power in 2003.
The high proportion of fossil gas has not only raised our emissions (natural gas plants produce about 20 times more CO2 equivalent per unit of electricity than wind turbines, even with Carbon Capture and Storage); it has also exposed us to large supply variations like that of Q4 2021, which cause havoc with wholesale electricity prices.
Returning to the question of how to find new and creative ways to decrease the financial burden of social care, the data provides a clear answer. Building up renewable energy over the next 10-20 years will decrease both volatility and overall prices on the electricity market, which will save money for the same people who bear the largest financial burden of social care and from fuel poverty.
If renewables prices were still significantly higher than fossil fuel prices (as they were even five years ago), this entire argument would be pro-fossil-fuel. Obviously that wouldn’t tip the balance in favour of fossil fuels overall, but it would nudge the scales, which is not a comforting thought.
In the meantime, though, the adult social care budget is still suffering from failures in energy policy. If we don’t start decommissioning fossil fuel plants, that problem will only grow. ◼️