With very few notable exceptions, it seems the British media is stuffed with hacks who exhibit no evidence of an enquiring mind, no willingness to question and test the stories they are being fed and no interest in publishing challenging pieces that readers need to be told, no matter how difficult the conclusion is for people to accept.
The Mail on Sunday has one of its increasingly half baked, cor blimey editorials today where is proclaims ‘We must sort out fuel prices… right now’. It doesn’t perform any real service to its readers because it doesn’t recognise and set out the real problems about energy prices.
At the most simplistic level, prices are rising for four reasons:
- Increasing energy prices on the wholesale market are being passed on to customers by the regulated providers
- Increasing government-imposed ‘green levies’ imposed to pay subsidies and grossly inflated tariffs to corporates and land owners for building and hosting inefficient and expensive wind turbines that are incapable of replacing the conventional energy generating capacity
- Additional government-imposed levies designed to drive up the cost of energy in order to leave many people with no choice but to use less energy than they do now, regardless of how cold it may get in the winter
- The regulated providers seeking to maintain a margin, which in the retail market is only around 5% profit, as reward for the good they provide
But you would never understand this from reading the Mail piece. Instead it adopts the economically illiterate position of the Archbishop of Canterbury – a man with a commercial background who should know better – which effectively calls for the energy providers to absorb the rising cost of energy themselves and provide it to people at cost, or even at a loss. The Mail barely touches on the significant impact of government policy.
Where is its 4 page spread examining the policy of using pricing as a means for forcing reduced energy use? Where is its editorial attacking the imposition of vast levies to install turbines at a cost of billions of pounds, which generate on an average less than 25% of their stated capacity – and where the guaranteed price for what little energy they produce offshore will be £155 per megawatt hour (MWh) and onshore is £110/MWh – falling to a still eye watering £135/MWh and £95/MWh respectively in a couple of years? That compares to a current guaranteed price for nuclear power of £48/MWh. Even that price is expected to almost double to around £90/MWh for new nuclear build as the government fritters away our money as it desperately tries to make up for outrageous strategic failure on new energy build over the last three decades.
What the Mail also fails to grasp, let alone report, is the disturbing fact that the structure of energy prices and what they are made up of is now so complex, not even the most savvy analyst can break down where the money we pay actually goes to.
There are so many impositions and elements in energy today that working out who the money is going to is virtually impossible. Which could explain why we see Scottish and Southern Energy declaring that the cost of energy has gone up 4% in the last year, while British Gas say it is 13% in the last year. The only way to achieve transparency in energy pricing is to start again from scratch and identify exactly what goes where. Then we could have some confidence in British Gas’ breakdown, shown below:
What is clear is that while there are pressures from government and consumers on energy companies to rein in their costs, no one seems to be connecting the dots about how government and regulation is driving up the wholesale costs to energy companies, how transmission charges are rising unchecked and how direct levies and taxes by government are also not subject to proper scrutiny or downward pressure.
Until a lot of light is cast on this and the government is called to account for its part in this – and forced to explain to people the global and EU dimensions to the vicious policy of forcing down demand through higher prices in the name of ‘sustainability’ – the cost of energy is going to continue to rise.
The lightweight intervention of Dr Justin Welby and the weak arsed commentary of the Mail achieves nothing and helps no one.