The energy industry needs to take the lead in developing new policies and regulatory frameworks because the government is too busy.
That’s according to Mark Gregory, EY’s Chief Economist, who spoke to ELN at our Energy Live Expo last week.
He said as a consequence of the Brexit vote, higher inflation and low business confidence have caused the economy to slow, hitting consumer spending and causing knock on consequences for energy sector.
Mr Gregory suggested although these issues need resolving, the government is very busy and preoccupied with other issues.
As a result, he believes the energy industry needs to take the lead itself in helping come up with new frameworks, encourage investment, generate returns and make consumers and businesses feel they’re paying a fair price for energy.
He said because of repeated patches, different interventions and structural shifts, the sector isn’t optimised for what it needs to do – instead Mr Gregory believes a wider reform is needed to fix issues and make sure all aspects are aligned.
He added the price cap was one such patch and claimed it was an intervention more politically driven rather than economic.
He said: “If we can create a framework, [it’s] important to understand what the true cost of energy is and what we should be aspiring to, particularly given our climate change commitments as well.
“It makes more sense to step back and think longer term about what we’re trying to do rather than just keep trying to add patches, I think our experience over recent years shows the patches don’t work and probably make things worse, not better.”