Gas and electricity could be sold to consumers via a state-controlled body under radical reforms, proposed by the regulator Ofgem, which acknowledge that the decade-old free market approach to energy is no longer working.
Ofgem has also proposed setting minimum supply obligations on energy companies to make sure the lights don\’t go out, in moves reminiscent of the new capital requirements that have been placed on banks to stop them going bust following the financial crisis.
Energy experts said that the regulator\’s proposals represented an \”extraordinary volte-face\”. Ofgem has been one of the biggest advocates of a liberalised energy market, arguing that companies could be left to build enough new power stations and low-carbon forms of generation to guarantee energy supplies and reduce carbon emissions.
But only a fraction of the estimated £200bn investment needed by 2020 has been made, because volatile energy prices, and the short-term supply contracts that have characterised liberalisation, have made spending such huge sums too risky.
What\’s the next one after \”facepalm\”?
Lordy almighty this is the most incredible stupidity.
The reason that investment hasn\’t been happening in new plants is regulatory uncertainty. Will anyone be allowed to build new nuclear? What will be the insurance arrangements for those who do? Where might such plants be built? What about waste?
With coal, what will be the carbon capture requirements?
The current government has been pissing about not taking these decisions for a decade. Thus people haven\’t known what they can build, where, or how much it will cost.
So, given that the cock up is entirely government made, the solution is to add government to the process?
What on earth are these idiots at Ofgem thinking?