Britain’s energy market has become so heavily distorted by subsidy payments for suppliers of low-carbon, renewable and nuclear power it is now “completely opaque”, Lord Darling of Roulanish claimed last night. During a session of the House of Lords economic affairs committee the former chancellor suggested that the UK’s energy market is failing to deliver value for money for consumers and sharply criticised a plethora of government subsidy schemes. “Who represents consumers?” Lord Darling asked. “Who on earth is responsible? This isn’t a market. It’s completely opaque.” The remarks came during a session on the economics of energy policy with Dermot Nolan, chief executive of Ofgem, Britain’s energy regulator. Mr Nolan appeared to acknowledge growing problems within the market after a steady erosion of free competition over the past 15 years. He blamed subsidy schemes designed to support the development of wind farms, solar panels and nuclear power stations, including the £18 billion Hinkley Point plant, which was approved this year. Mr Nolan said that he was “deeply sceptical” of subsidies, but this was the consequence of years of government policy to tackle climate change. He suggested that a “more elegant” way to support cleaner alternatives to coal and gas-fired power would be a carbon price paid by all generators. “It would be simplest to choose a carbon price,” he said. He also acknowledged that UK electricity prices have risen over the past decade when compared with other EU countries. “Our electricity prices are above the EU average,” he said.
Times 23rd Nov 2016 read more »