This made for quite a busy weekend:
I hope it will make for a busy Monday too. Some engagement with the industry is already beginning to seek answers to issues I have raised here and here.
I have no idea if that will work, but given the impending poverty crisis that is going to be unleashed in the UK I have to try to explain what is happening so that action to address issues can be demanded.
That is the point of this exercise.
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On electricity generation in Scotland I think wind represents >70%; nuclear circa 15% (?), hydro 10% (?); seem to be the figures, at least in broad terms (it is striking how tricky it is to find the specifics easily). Oil and gas as sources of electricity generation therefore seem relatively low in Scotland, so why are the costs of electricity escalating so much for Scottish consumers?
You know what the answer is John….
Mighty impressive Twitter engagement Richard. But this is a mighty concerning issue. It’s directly concerning most households, not just the poorest.
The structure of the UK energy sector with its privatised regional distribution monopolies adds layers of additional complication.
An article in today’s FT covering a new report by Common Wealth has also looked at the profit margins of UK gas and electricity distributors. Additional material.
https://www.ft.com/content/aff47fb4-34ec-49c7-8aca-ebd462f4142b
42%
Staggering….
The more I think about this (and other related issues) the more I keep coming back to “dual pricing”. Each Household should be permitted a certain number of kWh of gas and electricity at a low-ish, subsidised price. This should be sufficient for a moderate sized home but anything above that should be at a free market price.
There are a limited number of suppliers; each meter and its address is known – it couldn’t be too difficult to require all suppliers to offer this tariff.
For me, it meets several goals. It alleviates fuel poverty with transfers from rich energy users to poorer users. It maintains “price” as a discipline towards reducing consumption. It is administratively do-able. It would be politically acceptable to the vast majority.
I like it…
That is getting awfully close to universal basic services – a basic ration of electricity, water, etc. It would be a lot easier if we just nationalised natural monopolies, rather than pretending that the market can decide.
I went through a single tariff (why non earth not?) to reach that conclusion too
I would be quite happy with nationalisation; indeed, it is a superior option. But, politically, it rings alarm bells with some and I think the “basic ration” option might be do-able without nationalisation and deliver some good. “Politics is the art of the possible!”.
Weren’t TEQs a similar idea where low users could sell their spare allocation to high users, what happened to that idea, is it still alive?
Desp
Sure it is, flemingpolicycentre.org.uk/teqs
Richard, I think the gist of your argument is that the energy market is distorted by speculation and the quantity of oil available is much the same as ever. There is an argument that there is a shortage because banks won’t issue letters of credit for Russian oil shipments because of sanctions and a general chilling effects on trade. No letters letters of credit, no oil. So the shortage of deliveries is real. Your comments please.
Quantify, please?
When is this
Russia is still shipping I gather
Especially gas
But my pint is – it costs no more to create any oil or gas
That was the key assumption
Do not confuse cost and price