UK energy bills are soaring to record highs
carbonbrief.org
carbonbrief.org
We're rapidly approaching the point at which the only thing that's going to work is rationing.
I'd propose that we have marginal rates like income tax e.g. first X units for a household are 30p/kWh, second X units are 100p/kWh, third X units are 200p/kWh, with the aim of heavily penalising usage above what is necessary for basic needs. The bands need to be set based on analysing how much gas we can physically secure and deals need to be struck at a governmental level.
Basically, wartime footing to keep homes and factories running.
That might not even be enough, but the alternatives are worse; some mix of the following:
- people disengage with the system (e.g. ignore the bills, riot)
- millions of people end up unable to cook food or heat their home
- disposable income _disappears_. not goes down, but does not exist or goes negative for 80%+ of the population
The projections for early next year are that an average home will have to pay 7000 a year for energy, up from around 1000-1500 previously. It's not a matter of cutting back on luxuries, most households literally don't have that, and cutting energy use to 1/5th of their previous is impossible.
For businesses it's even worse, there's no cap, some places are facing 10x increases in energy costs e.g. just stop trading, your business model is unviable until/unless costs come down.
The UK government has cost us billions by denying permission for privately funded renewable energy projects simply on the basis that they look ugly!
https://www.carbonbrief.org/analysis-cutting-the-green-crap-...
https://www.theguardian.com/environment/2022/aug/25/solar-fa...
I am saying that it's the opposite, our complacency in switching to renewables has caused this situation
The issue I have with that article is that it doesn't say how many were accepted.
It could just be that overall there were more applications to build, with rejections rising proportionately.
The same is not true of government-subsidised projects in the UK like offshore wind. Those are guaranteed a fixed price by the government, and receive payments to make up the shortfall or pay back the excess under what's called a "contract for difference". The contracted prices of current offshore wind projects are... well below the current market price of electricity, let's put it that way. (Not every country does things this way. As an article that made it to HN the other day pointed out, Germany guaranteed a minimum and let suppliers keep the excess which was an expensive mistake: https://news.ycombinator.com/item?id=32556113) Offshore wind also fits better into an overall strategy of switching to renewable energy, since it has a much better capacity factor and is actually useful in the winter unlike solar.
It’s so frustrating, I agree with the criticisms of building them on agricultural land, but we are in a situation where we need that power now. The government should be pushing though emergency measures allowing these projects to be built. But then planning on pushing for further projects to utilise industrial roofs and car parks.
There are real reasons to block development, like industrial waste or noise, but this is ridiculous. Even housing NIMBYs can come up with more convincing reasons like pressure on local services or traffic.
This kind of interference with property rights should be impossible. The UK's planning system is unfit for purpose and is far too local. Locality always means that locals will block anything they can due to being change-averse, ignoring reason or morality.
Also, England rejected plan for tidal lagoon power plant in Wales https://en.wikipedia.org/wiki/Tidal_Lagoon_Swansea_Bay
So important that it's worth it for thousands of pensioners and poor people to freeze to death this winter?
It could even be extended so you are only eligible for the lower initial unit most if you have suitably insulated your house, using the government grants that are currently available.
Investment has started though - there's coire glas, which is taking about 5 years to build. 5 more of them and we could go 99% renewable on solar and wind alone.
That is a great analogy. Our technologies will improve, but it is madness to voluntarily depend on future advances that might or might not happen and might or might not be practical. We need Liberty ships (cheap, effective, reliable energy production units, however imperfect), not just sit here doing nothing because we’ll somehow figure out energy storage later, or we’ve read a pop sci article touting a new technology that’s unlikely to ever be practical.
We also need to realise that we need a total effort, not military but similar in scale to what we did during WWII. We need to build now all we can that is low-carbon, because half-arsing it won’t be enough. We also need to reduce consumption as much as possible. Keeping something close to a current western way of life will be hard enough, but things like humongous cars, SUVs and pickup trucks are madness. Even Teslas are very problematic and detrimental overall. So is living in the desert, and mass migrations even within countries need to be planned to avoid utter chaos.
Energy production is just the sharp tip.
So it helps, a bit.
E.g. FIRE. It's not unfair that those who retire early don't continue to get a salary.
It's not even unfair (on its own) that those who are irresponsible with credit cards to go on trips, instead of investing in their future (e.g. staying home and learning), later have lower income.
That's not unfair.
This is a massive market failure that needs to be addressed
Edit: just noticed I misread Austria as Australia (lol), point still stands though, a D rating is not that bad.
The entire real-estate market in the west (both buying and renting) is an intentional failure (but economic success for the owners) designed to be a zero sum game to squeeze newcomers and prop up existing landlords, asset owners, and banking profits on the backs of those trying to enter the market. And then western governments wonder why millennials and younger stopped having kids. Because you priced them out of home ownership, that's why.
Good luck getting the governments to break this vicious cycle and stop making real-estate an investment vehicle designed for huge returns, and good luck getting existing property owners in voting for policies which will lead to a devaluation of their homes.
I feel like if this trend keeps growing, sooner or later, eating the rich will be the only solution.
That would essentially be no change from now.
What, short of abolishing capitalism altogether, would be "fair"?
More money will always be able to buy more than less money. And the comment you're replying to would HEAVILY subsidize people for their needs, while discouraging everyone's wants.
Or, get this, we stop shooting ourselves in the foot, and allow businesses to purchase russian energy again.
So US currently engaged in Syria , Iraq and Libya is also slavery?
Im not sure any of those are akin to slavery. Choosing #2 as a hill we shall die on is particularly galling.
The poll where Russian soldiers pointed guns at crimeans in polling stations happened only in people's imaginations.
I, for one, am looking forward to dying of cold this winter on the principle of rejecting a democratic vote in Eastern Europe while we lavish support on such good and free countries as Saudi Arabia that only invade their neighbor in a good way.
This is the hill the western hegemony dies then let it be. The fbi is tracking all anti-nato comments so just be careful
But it makes sense from their point of view. The only reason to export to the West is to swap for real goods and services from the West. Since the West isn’t selling anything to Russia there’s little economic reason for Russia to sell anything to the West.
Russia has its own floating rate currency. It has no need of our promises.
"Size" of economy is not a real metrics.
You can have a huge-ass economy based on providing high-margin services, but it would be worthless if it is not sustainable.
On the other hand, take Russia that does not really do much of global market high-margin services economy, but has sustainable enough industries.
As for problems getting anything, they cant even source potatoes for something as basic as fries.
I explained why it isn't their source of income. They have their own currency with a floating exchange rate. Therefore what you think is their 'source of income' isn't. The FX system means that a Russian exporters 'source of income' (that which they use to pay their staff and suppliers) is the expenditure of the Russian importer, or the generosity of the Russian government sector - primarily the Bank of Russia. [0]
In local currency terms it is the Bank of Russia buying the gas, not the EU. That maintains the rouble monetary circulation in Russia, countering the drain to Rouble net savings and taxation.
[0]: https://new-wayland.com/blog/how-russian-gas-is-paid-for/
I mean, Europe's got something like 7 times the economy of Russia. And two European countries also have nukes and are on the UN permanent security council. If the sanctions against Russia weren't enough to stop the war, this winter is unlikely to be bad enough to stop Europen support of Ukraine.
Conversely, if Russia finds that it can wield its fuel as a weapon capable of destroying Europe by either riots or total economic collapse, then Europe automatically has an existential threat that only ends when Russia can no longer play that card.
And America will do what serves American interests, not necessarily what serves European interests, and they're not threatened by Russia cutting off its gas exports.
That doesn't mean their interests are the same as mine.
I'm not ukrainian, or russian, whatever the outcome of the conflict won't really affect my country unless we go out of our way to involve ourselves in it.
If staying out of it results in cheaper gas at the pump for me, then that's what we should do.
Come on now...
There are sanctions preventing Nord Stream 2 pipeline to be used. Sanctions also obstruct maintenance and normal operation of Nord Stream 1 pipeline, which had caused the reduction.
One could argue that Russia is not being too consumer-oriented and is overly pedantic in legal maters, but this is hardly surprising at the current level of relations.
Mark my words: this is the end of western hegemony.
Especially since brics is taking off, they are launching their own currency and tons of countries want to join it.
Bojo was a complete bozo to amp up the war.
Elect a clown, expect a circus
That's only true on elastic consumption.
Russia can't defeat Ukraine with Nato weapons. Once the gloves are of they can either take the deal with the international coalition now and get all the money for no work, or become even more of a joke and take the deal later anyway.
No nukes need fly, because we are not an existential threat and Russia cannot do much in a conventional war.
Don't expect that this will end up being as nice and comfy as bombing other 3rd world countries, which is the only military expertise that NATO had had for decades.
A few hypersonic Kinzhals with tactical nuclear warheads would surely be a refreshing response to NATO's typical "hit-and-run" tactics.
That would leave Putin with no power. So no, that is not going to happen.
As for how competent Russia is, we have seen that. They are not.
Says who?
Just as you don't expect an immediate all out nuclear armageddon as a response to your attempts to "bomb shit out of Russia", there won't be an "armageddon" response when Russia retaliates wiping a few crucial military installations from with the face of the Earth.
Nah, going all out with a civilisation-ending scenario would be the last resort, when everything is lost, and every other possible and dislikable option had been exhausted.
Up until then it will be a nice long and bloody escalation. Tactical nukes, chemical and bio-weapons provocations, assassinations, terrorist attacks, mass mobilisation and conscription -- all the fun stuff akin to what had been done to the Arab world, but on a much grander scale and incomparably higher stakes.
I'd doubt even the US would able to sit this one out. Can't imagine their shock from an actual real war, given what kind of tragedies were mere child's play things like 9/11 or Pearl Harbor.
Except of course Ukrainians are paying for it with their lives, sacrificing themselves for the safety of the rest of the world.
You meant that they are conscripted/mobilized and sent for slaughter for the safety of establishment's political interests?
Special rates for those that use electricity to power medical devices.
That way you don't subsidize people like me, who honestly don't need it.
Otherwise if nothing else you're incentivizing people into using their freebie electricity instead of gas for heating, if they've run out of freebie gas but not electricity.
Capitalism isn't perfect, but pricing goods according to supply and demand is kinda the thing the market does best, and if you think you'll do better you should think again. Nothing is perfect, but interfering with this part of capitalism is pretty much guaranteed to have unintended consequences.
Taking this approach would punish us for trying to move away from direct fossil fuel consumption (I'm aware that much electricity still comes form fossil fuels).
So there is a lot of nuance in the proposal - allowances for electric cars, heat pumps (which the government is actively encouraging), mains gas, etc. Do each of these affect the basic needs?
An alternative that crossed my mind was to change the unit price based on house hold income. Higher income households would pay a higher rate per kWh, which I think would be considered progressive. Can't see the Tories ever going for that though.
And the reason for the SC doubling is to compensate energy providers for taking on the customers of energy providers that went bust.
Instead we've been prattling about waiting for a few old people to decide who will be the next PM, both of whom have promised not to expand renewable elecricity production, and thus to increase gas usage.
Your proposal of marginal rates relies on people understanding what a kWh is and being able to measure it themselves. Only about half of houses have smart meters, and when people get a £3k bill at the end of the month they will simply not pay it, which will mean mass moving of people onto pay as you go (push of a button to do that with smart meters).
Better to charge the £2/kWh but give every meter a £3000 lump sum (or £300 a month or whatever).
That said, I'm on a fix at 20p until October 2023, and I'm on oil heating which is currently about 90p/litre or 9p/kWh. Was about to go for a heat pump (literally the only reason I didn't do it was because the company that quoted it couldn't be bothered to phone me back last week), but instead I've just paid what seems a ridiciulous price for oil (90p/litre) and will use the capital to fund (or part-fund) solar+storage.
Believe otherwise at your own peril, folks.
I am also typing this on a macbook air, which has a powersupply smaller than some fast chargers for android phones.
I think the heat and the macbook is fair enough, as I am actually using less energy than others this way, but how would your system account for buying prepared food vs making on your own?
(13) missed calls from Mensa.
How long it could sustain this, or whether it would be regarded as state sponsored piracy, is debatable.
But Tory idiots in power. Probably won't address it until after WW3 kicks off.
It makes a nice headline during this crisis, so the media is going crazy talking about it. Much of the public is complaining that it keeps going up and up as they don't understand the cap's origin nor intention.
It's annoying that the mass media refuses to publish the actual unit rates and instead obsess about "average bills" (which, among other things, hides the reality of extremely high bills this coming winter)
As well as the short term energy market, "suppliers" like Octopus also hedge by purchasing contracts to supply electricity far in advance. In fact the bulk of electricity is purchased this way, which makes that half-hour short term market look more volatile than the reality of energy trading. It also means that to be a serious player you need a lot of capital to make your purchases earlier and with better data than your competitors.
The existence of numerous consumer suppliers is, indeed, pointless, it's just Tory orthodoxy which causes these to exist, you obviously don't need the suppliers since they just basically shuffle paperwork. But there really are wholesale prices, and so there really is a wholesale energy market, even if there was a single government consumer supply company, it would be buying energy from the market, at the market price. Unless you want the government to also own all the power generators, and all the other countries we are buying energy from, which I think those countries might not agree to.
The UKs (complete lack of) leadership is going to send the country into an economic meltdown larger than any in living memory unless something seriously drastic is done by January.
I am already on rice and beans or porridge for every meal. If nothing is done I will literally be reading by candlelight under 5 layers this winter.
I don't live in other countries in Europe. It's sad that they also have issues. However, I primarily don't want people in the UK to freeze to death because of an incompetent government.
That's not quite true. Only a few countries are facing a 100% (or 'more') wipe-out of disposable income for the majority of the population.
The UK is only really affected by Russian gas in it's impact on the global market. We can do fine without. Yet we are among the worst affected in terms of billing consumers.
Other governments are doing more in terms of alleviating household spending, policy change and enforcing windfall taxes.
And cap the EU CO2 emission trading system. Speculators are pushing up those prices making everything worse.
These prices are at least 50 % policy failure.
Basically to enable recouping investments in primarily wind/solar since they have no real ongoing input costs. The article explains it well, but doesn't paint a good picture until those future storage technologies are here.
Renewables bid low, because that accurately reflects their costs, which the bidding system is design to reveal, like an auction.
The only problem is that gas is scarce and really expensive. And people seem allergic to any solution which isn't to subsidize the cost of gas, driving up demand.
It's designed to repay investment into non fossil fuel power supply that don't have those variable input costs.
The wider range of prices is the new thing, but the cheaper sources getting paid at the marginal price was always the intention. It stops people inflating their bid, which renewables could do if they wanted to queue jump, they'd just be risking that they are the most expensive renewable and they don't get picked, and get paid zero.
It incentives the lowest cost producers (as long as it's regulated properly, see the Australian experience with gas cartels abusing the system).
Its there to make emissions expensive and reduce companies consumption. Its a very good system that looks like its working as intended.
There should be a scrapping of planning permission for the building of small solar farms and small wind turbines. They should be approving new wind farms at record rates. Instead it takes them years and years to approve this shit, and the NIMBYs get away with blocking it.
2 more years of this by the way. The state of this country...
I'd rather instead nuclear power plants since they're a fraction of the size compared to solar, or solar panels on top of existing buildings, or more wind turbines since they're more space-efficient and can alternatively be placed offshore.
It's been argued for years that it should happen as a short term fix for energy security, but didn't. And now we are here.
Sad, but unsurprising.
But we are paying market rates for it, which puts lots of profits in the hands of fossil fuel companies that came out of normal people's pockets.
Returning it to them is the economically efficient answer.
We have a Gas crisis - like the Oil crisis of the 1970s.
To get more gas we’d have to outbid other nations, and to do that we’d need to strengthen Sterling.
Which we could do by reducing other imports - particularly Chinese ones (leveraging their dirty peg to the dollar).
All we can do is reduce demand for gas or move the problem to some other nation via the floating exchange rate.
There are no good solutions for this winter.
I guess the UK does have some domestic gas production, so could ban exports of that and institute price controls severe rationing.
All the thing suggested by this blog do that (insulation, more renewables, efficiency).
They also mention some government things which don't help, but that's not what they are recommending.
This means that within about a year March 2022 to April 2023 the line will shifted for a single earner earning below minimum wage to a single earner in the 97th-98th+ percentiles.
If the cap reaches £7K a single earner household on £140,000 with a 5% pension contributions and a student loan (England and Wales) would be considered in fuel poverty.
Excluding pension contributions and students loans drops the required figure to be in fuel poverty to anyone who’s earning £110,000 or less.
The median disposable (take home) household income in the UK is £31,400 with the October price cap of £3500 more than 50% of households would be in fuel poverty already.
In January and April this will likely jump to 99% of households unless drastic measures will be taken.
One potential solution is to send troops to Libya, to sort that country out and help it export gas. I used to be horrified at thoughts like that but maybe it makes sense for everyone? Is it just something America does?
Russia or Russians don't want to destroy the west unlike Iran mullahs or Saudi royals
No.
You make it sound like the more Africans you kill, the more warmer Europe gets, which is nonsense. Last time I checked, wars only destroy.
Civilized discourse with warmongers is impossible. If you want regime change in some country thousands of miles away, go do it yourself. I am not going to send myself or my kids to die for your hubris.
Will it still be seen as "legitimate"?
Conservative/fossil fuel interests lied to us about renewables and insulation and pollution because they were getting a cut of the fossil fuel money.
We saw this coming decades ago (scandanavia went heat pump after the oil crisis, US President told people they needed to do the same)
This very article points out that we did it again the last time. Conservatives/fossil fuel interests use every high fossil fuel price event to lie to us and lock in more fossil fuel usage.
Day ahead electricity prices for EU - https://news.ycombinator.com/item?id=32618438 - Aug 2022 (160 comments)
Be careful who you vote for.
It won’t help with the standing charge though, which for me is typically the majority of the bill.
They clearly want to save the weapon for winter though. When temperatures drop, Russia will sadly have the entirety of Europe by the balls. It is simply unthinkable that the population will be willing to stomach blackouts or not being able to heat their homes.
I don't see a way out but the unfortunate outcome that Ukraine will be sacrificed.
Maybe they just knew that after building russia up as the "big bad" for the last long while (or maybe that was just the US), it would be political suicide for whichever politician first suggested capitulation. Probably still is political suicide. The prisoners dilemma at its finest.
Basically, Europe is buying less than half the usual supply of gas at 6x the price right now :(
It's a market, and the thing that is causing the price spikes is Russia cutting off their supply.
They'll still profit from the higher prices on the reduced supply, but so will everyone else who sells on the market at the market price. Basically war profiteering.
But siezing the windfall profits is also basic economics orthodoxy.
https://theguardian.com/australia-news/2022/jul/19/nobel-pri...
> The Nobel prize-winning economist Joseph Stiglitz has called for a windfall profits tax, arguing the idea is a “no-brainer” that has been taken off the table due to the influence of big companies
But I also don't see this as being that big a deal. Even if we had to turn off fuel for 2/3rds of the homes, people will just go to a home that can be heated and stay warm together. We'll survive and probably make new friends doing it even if we'd complain the whole time.
Or people learn to heat themselves up instead of the whole room, which uses less than 10% of the energy. We're an inventive species and in Europe we certainly have the means, we just need the motivation.
Half a loss for the russian that showed the world their military wasn’t as good as they thought. Half a loss for the EU that showed their economical weakness as they couldn’t make a medium country’s economy explode even if they did all they had in their power. And globally a huge win for the US.
Honestly, i hope this serves as a warning for the EU citizen: we have very average people taking decisions in the EU governance.
This goes also for the US.
It seems obvious now that the people in charge in EU lacked serious strategical skills. We followed our emotions, did a lot of communication, we made ourselves look good, but ultimately we could end up with the worst of all options: ukraine split in two, and an economical disaster for the whole EU.
Only the US will exit from the crisis with a fantastic improvement (like every time europe starts an internal war).
Well no, the worst option was going to happen, Russia takes over Ukraine, then takes over Transnistra/Modova, solidifies its hold over Belarus, then why not take over Eastern Europe again. Splitting Ukraine and having expensive gas and a recession isn't so bad. Of course taking back Crimea is what we should be aiming for.
My fear is the gov will do everything they can to prop it up, like in covid, possibly leading it to rise yet again.
This was certainly created with good intentions, but the result today is that even in countries with nuclear-dominated electricity (such as france), electricity prices will soar tremendously.
Imagine every bit of food you ate cost the same as the most expensive. The caviar goes up, and suddenly no one can afford to eat.
Why don't we use less caviar and/or also suspend the stupid rule about food price?
Owners of food businesses getting paid caviar prices for delivering scotch eggs. No, let's wait till some people die, because I'm getting rich.
Right wing governments really don't like that idea. See their reaction to COVID, they really heavily depend on the idea that the people with all the money 'earned it'.
Much easier to blame renewables.
It's always the renewables isnt it. They kill birds and give you ear cancer and don't even really work. Not like those superb fossil fuels that have no drawbacks at all.
Who wants to listen to experts when you can just create a crisis by ignoring them and then blame it on the experts you didn't listen to.
https://en.m.wikipedia.org/wiki/Merit_order
> The historic methodology for economic dispatch was developed to manage fossil fuel burning power plants, relying on calculations involving the input/output characteristics of power stations.
Which seems relevant when people are talking about society collapsing and people freezing to death. And some people have strong financial incentives to not fix it.
I think you need to read your economics text books again. Yes marginal costs can impact the marginal supply of electricity, but the price is set by basic supply and demand. In a shortage if there isn't any gas, gas powered stations are off, if isn't enough electricity to go around the prices goes up until people stop buying it.
FWIU, once the gaz station are active ( because of a surge in demand) the price is set to theirs for the whole electricity produced, not just the one they produce.
This threshold effect is very peculiar and is very different from other markets (i assume oil extraction cost are lot different depending on where they take place, but for electricity in our current situation the cost difference are so wide that it sure makes the whole system look a bit absurd)
Right now there are new incremental suppliers waiting to deliver electricity so demand destruction is the only thing to stop the price going to infinity.
The decision to combine all kinds of electricity under a single market is arbitrary. it was of course made for convenience for the consumer, i suppose. I'm clearly not an expert, so i can't pinpoint exactly what makes the current situation weird. Maybe it's the fact that energy production is a strategical matter often determined at a country level, and so having all the benefit of the "best" strategy lost to the customer, simply because other countries didn't make the correct choice, seem a bit wrong.
Or maybe it's the fact that we chose to not make a distinction between local price and foreign price ? ie: have a local price for when the electricity produced is consumed in the same country ?
https://www.bbc.com/news/science-environment-62652133
"They say the plant, near the border with Finland, is burning an estimated $10m (£8.4m) worth of gas every day.
Experts say the gas would previously have been exported to Germany."
> Germany's ambassador to the UK told BBC News that Russia was burning the gas because "they couldn't sell it elsewhere".
> Scientists are concerned about the large volumes of carbon dioxide and soot it is creating, which could exacerbate the melting of Arctic ice.
Apparently if Germany burns it to produce energy no carbon dioxide is produced.
So the carbon dioxide doubles.
This is just naked profiteering at the energy producer stage for those that aren't using natural gas as their sole energy source.
It isn't costing any more to produce electricity from nuclear, coal, hydro and renewable sources and yet these are being priced at the same rate as gas [0].
So, for example, British Gas (BG) and EDF are profiteering massively since they use no, or very little, natural gas.
All energy companies in the UK are required to publish their energy source mix. Here for example are the six largest producers[0]. There are many more smaller producers and associated retail suppliers that use them and many are focused on 'green' sources:
Nuclear Coal N.Gas Renew Other Non-Gas Market Share[7]
EDF[1] 62.1% 1.3% 7.5% 29.0% 0.1% 92.5% 18.52%
BG[2] 35.0% 0.0% 0.0% 65.0% 0.0% 100.0% 23.70% (a)
EON[3] 5.7% 3.5% 43.5% 43.7% 3.6% 66.5% 14.07%
NPOWER[4] 6.9% 4.2% 52.6% 31.9% 4.4% 47.4% 24.07%
SCOT PWR[5] 6.0% 4.0% 46.0% 40.0% 4.0% 54.0% 10.00%
OVO/SSE[6] 0.0% 0.0% 49.6% 50.4% 0.0% 50.4% 18.50% (b)
(a) British Gas is a trading name of Centrica which was formed when the original British Gas plc was split in a de-merger in 1997.
(b) OVO bought SSE in 2020.
[0] https://www.energycompanynumbers.co.uk/who-are-the-big-six-e...
[1] https://www.edfenergy.com/fuel-mix
[2] https://www.britishgasplus.co.uk/fuel-mix
[3] https://www.eonenergy.com/About-eon/Fuel-Mix
[4] https://npowerbusinesssolutions.com/company/fuel-mix
[5] https://www.scottishpower.co.uk/about-us/performance/fuel-mi...
[6] https://sse.co.uk/v3/assets/blt09078e271abddd45/blt04622618e...
Prices aren't determined by costs and never have been. Prices are only determined by supply and demand. Not saying it's right, but you're framing this as some kind of unexpected phenomenon when this is obviously how things work.
More regulation is needed to stop people dying in the cold (obviously) but let's not forget why price signals are useful: the possibility for naked profiteering should act as a huge incentive for renewable generators to invest! But in reality, the UK government is going to start cracking down on wind and solar, which is insane. Residents of areas with planned renewable projects also have a habit of blocking them for inane reasons.
If owning a wind farm is a license to print money, we should LET PEOPLE BUILD THEM!
OFGEM (Office of Gas and Electricity Markets) [0] imposes retail price caps based on what it considers 'fair' for the retailers, and this came about specifically because retailers were charging standard-variable-rate and pay-by-meter customers excessively as well as having far too many 'offers' that confused customers.
There's nothing to stop the government amending the legislation with a 1-clause Bill that gives OFGEM the power to impose a cap on the energy producers.
I agree about building wind farms. I'm on a farm where a neighbour wanted to install a single turbine for local generation but it was refused - due to NIMBYs in villages 2 miles away complained it would "spoil their view" despite the fact most of them are out at work all day and probably only see that view for 2 minutes a day, if that!
[0] https://www.ofgem.gov.uk/about-us/our-role-and-responsibilit...
I should've been more precise - the price the suppliers want to charge is only set by supply and demand. They'll charge whatever the market can bear. If the cap is lower than that, they'll charge the cap. That's an inescapable feature of markets.
If Ofgem caps the prices for producers, the reaction of the producers will obviously be to limit production. They'd prefer to produce when profits are high. The next step would be for the government to mandate production, and this is another stopgap measure on the way to admitting energy markets don't work when one of the largest global energy producers are actively fighting an economic war against us.
My point is just that we shouldn't be at all surprised when markets don't work when one of the largest actors is behaving in an economically irrational way. We shouldn't be surprised when countries will abolish any kind of energy market and set supply and demand centrally by controlling producers and rationing.
There's good reasons for this in normal times. But at the moment various non-gas suppliers are getting windfall profits because of random world events.
Generally you dont want to micromanage things because it makes businesses nervous, but if Margaret Thatcher can do windfall taxes, so can the next PM.
At the very least we should stop subsidizing the fossil fuels.
Source?
Those statements hopefully amount to nothing, but they are extremely worrying.
fake austerity brought about by the top 1% taking everything for themselves. same old bs.
Short sighted cost cutting and focussing on ideological issues like Brexit while doling out lucrative contracts to connected parties during a pandemic.
So horrible that in the current leadership contest there’s not much either candidate can say that’s positive about their last 12 years in government.
What we need is clear and efficient crisis response and all the Tory government has shown so far is a colossal ineptitude and blatant corruption coupled with near sociopathic disregard for the wellbeing of most people.
It involved no thinking beyond "will it help me be elected prime minister over the next two weeks?"
She could get herself elected, deliver a tax cut worth £1 in absolute terms to every tax payer and claim she delivered under difficult circumstances.
Rishi at least isn’t lying about the challenges but honesty doesn’t work so well during elections as he’s sadly learning. But crocodile tears from me for his plight.
This is true of most top-tier politicians. Are you a child?
How do I know this? Well the majority of the population pay less than £7k in taxes per annum. And that’s where energy is expected to be within a year. So even if all those people were paying no tax at all (and this is an extreme and unrealistic scenario that’s not viable), it wouldn’t offset the cost of household bills.
Not to mention that businesses aren’t protected by the caps so the cost of everything else will go up