It seems that the light is beginning to dawn. A press headline from August 4th reads “Reforms to add £300 to energy bills“. Consumer groups have warned that this increase could be “the last straw” for hard-pressed households. The energy pricing website uSwitch.com says “seven million families could be left shivering under the spectre of fuel poverty”.
And it seems that David Cameron is listening, and is alarmed. And so he should be — this could lose him the next election. But the question is — why only now? Industry sources, academics and think tanks have been pointing to the appalling effects of our “green” plans on our energy prices for many months. We are set to give ourselves the most expensive electricity in the world. If I can say so modestly, I’ve been banging on about it for years. Whole books have been written about it. But apparently it takes a report from a Downing Street insider, Ben Moxham, to get Cameron’s attention. Admittedly, Mr. Moxham has considerable expertise in this field, having worked for BP, and later for a private equity firm run by Lord Browne. But one might have expected Downing Street to have been aware of the problem before now.
So far, Cameron’s response to the crisis has been to seek to bring down energy prices by giving more powers to Ofgem, and by increasing competition. Chris Huhne, on the other hand, pins his faith on energy-saving measures by householders — as though some extra loft insulation could counteract price rises of 30 or 40%.
These “solutions” are simply whistling in the wind (a slightly more robust metaphor comes to mind, but is unsuitable for family reading around the fireside). It is fiddling at the margin, while energy prices continue their relentless escalation.
Apparently DECC, the Treasury and the Department for Local Government are going to get their heads together to see what can be done.
I don’t imagine for a moment that Cameron’s aides are chewing on their fingernails in anticipation as they await my advice, but I shall offer it anyway. First, we have to abandon this lunatic race for wind energy. It can’t be said too often: wind energy means we have to make the same investment twice over: once for the turbines, and again for the conventional back-up (probably gas).
So the alternative strategy is:
1 Cancel the wind turbines
2 Build gas-fired capacity for the medium term
3 Tell the EU that we are unable to implement the Large Combustion Plant Directive, and that we will not close down our coal-fired power stations. Add that we will not entertain any fine or penalty for being in breach of the directive.
4 For the long-term (ten years plus), build nuclear power stations (and keep building them until they can supply say 50% of UK capacity, against less than 20% today).
There will still be high costs for new investment, but at least the investment will deliver competitively-priced energy.