Guest Blog: Mervyn Bowden – does ownership of generation matter?

I’m old enough (only just) to remember some of the pros and cons of public ownership of key infrastructure in this country and am amazed it’s still on the political […]

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By Jonny Bairstow

I’m old enough (only just) to remember some of the pros and cons of public ownership of key infrastructure in this country and am amazed it’s still on the political agenda for the election this time around.

Clearly there’s much controversy, not only around the degree of foreign ownership of our utilities and the risks this potentially poses but also the relatively poor performance of many of them.

There are so many issues around this subject you’d never expect politicians to come up with the right answers – unless they have some vested interests at heart of course. How many ex-energy ministers currently hold commercial positions in the energy industry?

Let’s get real

In the main, the old nationalised industries were rendered moribund by their own lack of performance, inability to attract investment and complete beholding to political interference.

But there is a point and it’s been exceeded many times in many industries, where pure greed and incompetence have overtaken the core essential needs for service provision.

How many energy suppliers can hold their heads up high and say they’ve honestly done the best for consumers?

How many heated debates have there been over recent years about energy security?

Has the regulator, OFGEM, made any difference to these debates and the ongoing future of energy supply in this country?

Crunch point

For energy, it ain’t difficult surely – what we need is to ensure we have the energy we need for our own purposes, when we want it and at a price which compares to others around the world. Simples!

If anyone tried to return the current energy generation and distribution infrastructure to public ownership it would undoubtedly be a disaster and suffer from all the problems it had many years ago.

The market has changed immeasurably with the introduction of low/zero carbon energy and the complexities of managing these into the wider generation portfolio.

But a smidgeon of central planning wouldn’t have gone amiss somewhere along the line.

Domestic competition

Whilst the “Big Six” have had an awful lot of flack, fines and political interference via successive governments, may the current picture be there are simply too many suppliers with too many tariffs?

Why should there be so much difference in energy tariffs for what is basically the same commodity? Why do we need so many tariffs? Why not have a specially created and subsidised tariff for the fuel poor and a reduced rate for those on prepayment meters? And simple tiered tariffs for everyone else dependent on location and consumption (if smart meters really work!).

Whilst energy costs are massively important to the fuel poor, the elderly, young families and low earners, they are an almost complete irrelevance to those on higher incomes.

Is this going to drive you to distraction?

But it does make you wonder whether there’s an eclectic mix of public and private enterprise which could deliver security along with economic, maybe even slightly subsidised tariffs.

This could potentially ensure those in fuel poverty are looked after without fleecing those on higher incomes in a way they would notice.

And given the fickle nature of geo-politics, perhaps it would be nice to know the UK has greater control and certainty over its fuel generation over future years?

Mervyn Bowden is the MD of Intuitive Energy Solutions.