Linking electricity and gas prices cannot be the case forever.
That’s the suggestion from the Business Secretary who spoke earlier during a session of the Business, Energy and Industrial Strategy Committee about the government’s plans to provide further support for customers struggling to pay their energy bills.
He said: “One of the things we are very keen to do in BEIS is to look at the pricing mechanism in the electricity market because it cannot be the case forever that we can link directly our electricity prices to gas prices when gas is only a portion of the electricity generating mix.”
A few days ago, the Prime Minister highlighted the same issue and touted it as one of the problems of the current energy system.
Boris Johnson said: “That is frankly ludicrous. We need to get rid of that system, we need to reform our energy systems as they have done in other European markets.”
Mr Kwarteng went on to say: “All our constituents are paying a price for electricity which is directly related to the module cost of gas production and you can see that in the system 40 years ago, which was largely based on coal and gas that made sense.
“As we progress into the 2020s, we have a system in Britain, where we have a huge diversity of sources of power. So, the price you are paying does not reflect the actual cost of generation.”