UK Energy Prices

There seems to be two choices, spend billions giving us handouts, or spend billions on buying the suppliers, and then more billions reducing the price we pay.
This assumes the actual gas/electricity will still cost the same for the suppliers to buy, regardless of who owns them. The second option sounds more expensive.

[GrimUpNorth]

Originally Posted by nomadking

The first step to potentially solving a problem, is to actually properly understand it. That involves not allowing people to be fed fake news.

To understand it, you would have to accept that nationalising anything that moves, will not solve anything. Private companies tend to go to greater lengths to buy things at as low a price as possible. A nationalised business isn't going to magically lower costs.

Lots of words but not saying very much. So the question, unsurprisingly still remains. How would YOU help people who are struggling at the moment and those who are going to struggle when the cap goes up again in October and January as it seems more than likely to do?

[TheDaddy]

Originally Posted by GrimUpNorth

Lots of words but not saying very much. So the question, unsurprisingly still remains. How would YOU help people who are struggling at the moment and those who are going to struggle when the cap goes up again in October and January as it seems more than likely to do?

Why is it down to him to offer a solution, I know the government has abrogated all responsibility for at least a month but why is it up to him to provide answers

[GrimUpNorth]

Originally Posted by TheDaddy

Why is it down to him to offer a solution, I know the government has abrogated all responsibility for at least a month but why is it up to him to provide answers

Very quick to pick fault and dismiss suggestions and opinions of others but not offering anything of any substance himself. The truth is I don't think he's got any suggestions that would stand up to scrutiny.

As I've said before we shouldn't have squandered our national resources but maybe it's not too late to set up a sovereign wealth fund. Selling every asset the country has is a very short sighted approach and if nothing else we should learn that making a profit out of a public service shouldn't be the be all and end all. Make a profit yes, but let the country as a whole benefit from the profit. Other countries have state owner oil and gas sectors and not all of them have turned out like Venezuela.

https://www.thetimes.co.uk/article/2...fa906ca19dc7c0

Rishi Sunak has set out plans that he hopes would cover the total cost of rising energy bills for up to 16 million vulnerable people, as he challenged Liz Truss to follow suit.

In an article for The Times the former chancellor said he was prepared to find up to £10 billion to soften the impact of this October’s price rise on top of the support announced by the government in May.

Every household would benefit from a £200 reduction in their bills by abolishing VAT on energy, in a challenge to Truss, who has said only that she would consider the measures.

https://www.thetimes.co.uk/article/r...able-jfx2n2gsj

Today I can be very clear about the principles underpinning my approach, I can reasonably estimate what is likely to be required and I can explain how we pay for that. Firstly, there are three parts to my plan: support for the most vulnerable, support for pensioners and some support for everyone.

The first two groups will need the most help because these are people who simply cannot increase their incomes to meet their energy costs and are the most vulnerable in society. For them, we have an existing channel by which we can get money to them quickly: the welfare system.

Having explored all options, I know this is the quickest, most effective, targeted way of getting support to these groups of people.

It is tried and tested — the first payments have already gone out — and we can provide more support using those same channels, including the winter fuel payments and cold-weather payments.

It’s also important that we provide everyone with some help because of how drastic the price hikes will be. So my VAT reduction on energy bills will provide every household with around £200.

Secondly, on the scale of the challenge, it currently looks like the gap between price expectations when I announced the previous package of support and now is in the region of £400 to £500. When we know precisely what the increase is, I will come forward and confirm the exact level of support. At the moment, the gap — beyond the VAT reduction on fuel I’ve already announced — looks to be in the low to middle billions. But I’m realistic. It could be more.

Originally Posted by GrimUpNorth

The truth is I don't think he's got any suggestions that would stand up to scrutiny.

Doesnt matter if he does or does not, it doesnt make his points wrong.

There is no "magic" answer.

[jfman]

Originally Posted by Paul

There seems to be two choices, spend billions giving us handouts, or spend billions on buying the suppliers, and then more billions reducing the price we pay.
This assumes the actual gas/electricity will still cost the same for the suppliers to buy, regardless of who owns them. The second option sounds more expensive.

Buy the suppliers and develop the means of production in the national interest. Prices stay high if you buy intermediate actors and simply play the market game at an international level.

We need to do the things the private sector won’t do - actually satisfy demand removing the price premiums. Wind farms, nuclear reactors, you name it.

The problem for the Tories is if the public see this as the way forward for energy what next? Water? Exorbitant costs to have hundreds of thousands of tons of human waste released into rivers and the sea? Telecommunications? Railways?

None of these sectors are genuinely competitive marketplaces as understood in economic theory. Nobody can enter these markets easily without significant investment. Meaning incumbents can continue to price gouge end users.

[ianch99]

Originally Posted by jfman

Buy the suppliers and develop the means of production in the national interest. Prices stay high if you buy intermediate actors and simply play the market game at an international level.

We need to do the things the private sector won’t do - actually satisfy demand removing the price premiums. Wind farms, nuclear reactors, you name it.

The problem for the Tories is if the public see this as the way forward for energy what next? Water? Exorbitant costs to have hundreds of thousands of human waste released into rivers and the sea? Telecommunications? Railways?

None of these sectors are genuinely competitive marketplaces as understood in economic theory. Nobody can enter these markets easily without significant investment. Meaning incumbents can continue to price gouge end users.

This and only this. The national infrastructure is not a fit for free market dogma how ever much the zealots will claim. Square peg in round hole. I am surprised that it has taken so long to get this on the national agenda. Trying to to argue how the energy free market sector can work is like arguing how many angels can fir on the head of a pin. There is no point.

Nationalise the sector. Employ the best management, paid at fair free market rates and invest for the long term. It is not rocket science.

[GrimUpNorth]

Originally Posted by ianch99

This and only this. The national infrastructure is not a fit for free market dogma how ever much the zealots will claim. Square peg in round hole. I am surprised that it has taken so long to get this on the national agenda. Trying to to argue how the energy free market sector can work is like arguing how many angels can fir on the head of a pin. There is no point.

Nationalise the sector. Employ the best management, paid at fair free market rates and invest for the long term. It is not rocket science.

Couldn't agree more, except I'd include the water industry too as they don't seem to have learnt the lesson from a few years ago when we had a shortage due to excessive leaks.

[TheDaddy]

Originally Posted by GrimUpNorth

Couldn't agree more, except I'd include the water industry too as they don't seem to have learnt the lesson from a few years ago when we had a shortage due to excessive leaks.

You know they only have to cut leaks by 16% for ofwat to be happy, water is the worst example of privatisation imo, 2 billion a year in dividends, companies loaded with debt and bugger all done to replace the infrastructure hence 2.4 billion litres of water lost a day

[nomadking]

Not quite sure how any of all that lowers the price of gas and other energy that comes from outside of the UK.
The biggest problem with infrastructure products is the ridiculous amount of time the planning permission process takes. Eg Thames Water have been trying to get permission for creating a new reservoir for over 10 years.
The UK has become too much of an undesirable place to do business(nothing to do with Brexit). Just look at all the nasty attention, individuals and businesses get from the media and the public. If I had a great business or technological idea, I wouldn't want to set up in the UK. Too much anti-success sentiment. It's been like that for decades.
It you're not trashed by the media and the public, you get trashed by taxes and over regulation, which adds to business costs.

[jfman]

Originally Posted by nomadking

Not quite sure how any of all that lowers the price of gas and other energy that comes from outside of the UK.

Another meaningless, arbitrary distinction created for no other reason than a diversionary tactic. Nobody claims nationalised industries would solely operate on the international markets - indeed it’d entirely defeat the point.

Anti success sentiment these aren’t entrepreneurs coming up with exciting new ideas. They’ve bought the family silver and charging you just to have a look at it through the window.

[1andrew1]

Originally Posted by nomadking

Not quite sure how any of all that lowers the price of gas and other energy that comes from outside of the UK.
The biggest problem with infrastructure products is the ridiculous amount of time the planning permission process takes. Eg Thames Water have been trying to get permission for creating a new reservoir for over 10 years.
The UK has become too much of an undesirable place to do business(nothing to do with Brexit). Just look at all the nasty attention, individuals and businesses get from the media and the public. If I had a great business or technological idea, I wouldn't want to set up in the UK. Too much anti-success sentiment. It's been like that for decades.
It you're not trashed by the media and the public, you get trashed by taxes and over regulation, which adds to business costs.

Agree with you on planning permission but the Conservative Party who have governed the country for the last 12 years are sympathetic to NIMBYS and make it hard for onshore wind turbines - the cheapest form of electricity. In their defence, it's a small country.

Private energy companies tend not to invest in long-term infrastructure and energy is a long-term business.

If you're overly-concerned about what people think of you, you're unlikely to be a successful entrepreneur. I don't think the UK is anti-success. The grass next door is not always greener.

---------- Post added at 10:56 ---------- Previous post was at 10:53 ----------

Originally Posted by TheDaddy

You know they only have to cut leaks by 16% for ofwat to be happy, water is the worst example of privatisation imo, 2 billion a year in dividends, companies loaded with debt and bugger all done to replace the infrastructure hence 2.4 billion litres of water lost a day

I would say it's worse than power. Power is more complicated with hedging and forward purchasing of energy, a complicated supply chain, plus switching suppliers, smart meters, an array of charging structures etc.

Water is a lot less complex and is a monopoly at regional level. To not get the basics right here is appalling. In my area, for example, there's a Thames Water leak that's been ongoing for at least three weeks impacting households' water supplies as well as blocking the road and being wasteful.

[denphone]

Originally Posted by GrimUpNorth

Couldn't agree more, except I'd include the water industry too as they don't seem to have learnt the lesson from a few years ago when we had a shortage due to excessive leaks.

The UK has not built a new reservoir for over 30 years and in that time the population has risen by around 10 million people.

Add all the excessive ongoing leaks and is it any wonder we have a escalating water shortage.

Originally Posted by denphone

The UK has not built a new reservoir for over 30 years and in that time the population has risen by around 10 million people.

Add all the excessive ongoing leaks and is it any wonder we have a escalating water shortage.

https://www.express.co.uk/news/uk/16...ht-latest-news

Water firms ‘sold off reservoirs that could have eased drought’ 'Profit ahead of supply'