Freezing energy prices, what an original idea in a “free market” situation?!? I shudder at the demonstrable lack of understanding which a former Energy Secretary has of the dynamics of the energy market and its impact on those on low incomes who will, if they believe anything politicians say, have slightly raised expectations based on what Miliband has promised.
The energy market is anything but perfect but what makes it even worse is the number of real and potential points of interference. It also has to be viewed in both a European and global context.
I was recently at a conference where the highly esteemed chairman asked an audience of several hundred whether they agreed with Mr Miliband’s price freeze – and not a single hand was raised in support.
Investment in anything, particularly electricity generation, is based on a long-term view of the returns possible in an informed way and ideally there is a compelling case to support this.
Double jeopardy – no energy security and higher prices?
Those looking to invest large sums of money don’t generally appreciate unexpected shocks of any kind, particularly those from a political direction, as they promote considerable nervousness amongst the investment community and a reluctance to commit to investment until a higher degree of certainty likely.
Miliband has very effectively put a lot more potential investment cash on hold until the outcome of the next election is known, further jeopardised UK energy supply and most likely will penalise the very people he’s supposed to be supporting.
Do we also really want the foreign companies who are supporting our country’s energy supplies to abandon the UK as a hopeless case, which doesn’t figure in their future plans?
Ex-Energy Secretary is just one of a long line
He is also one of many successive incompetents highly responsible for the delays which have resulted in there being no copper-bottomed certainty that, with National Grid projections of supply/demand margins this winter already down to 5%, the lights will stay on in an increasingly unpredictable environment!
Meanwhile the energy supply companies, who were the target presumably of Miliband’s apparent dash back to the 1970s, have pre-empted the whole piece and put out offers, quite within their remit in a free society, beyond the period Ed #1 was contemplating his freeze. The bit he didn’t get was to do with the price levels which have been adjusted to take account of known factors and semi-predictable risk. Will Mr Miliband be congratulating the energy companies on their commendable desire to help their customers with price certainty?
Next blog….the other Ed!
Energy saving expert Mervyn Bowden is the Managing Director of Intuitive Energy Solutions and will be speaking at Energy Live 2013.