Interventions in the energy market by successive governments have pushed up prices, but not secured supplies, peers found. A House of Lords committee said the interventions have led to an opaque, complicated and uncompetitive market. The peers blame “poorly designed government interventions in pursuit of decarbonisation” that they say have put pressure on energy supply and bills. The government said its priority was ensuring secure, affordable energy. In recent years policy has been focused on the so-called “energy trilema” of delivering security of supply at an affordable cost to consumers while meeting our climate change goals. However, the report states energy security should be the priority and that low-carbon policies have contributed to higher bills for households and businesses, leading some energy-intensive firms to relocate abroad. “It’s a very high price that is being paid,” says Lord Hollick, who chairs the House of Lords Economic Affairs Committee. He points out that green levies, which account for around 10% of energy bills, are set to soar: “Those renewable costs are estimated to go up to nearly 25% by the mid 2020s.” The committee says decarbonisation should be achieved at the lowest cost to consumers with targets managed flexibly. The report is particularly scathing of the recent agreement between the government and EDF for a new nuclear plant at Hinkley Point in Somerset. That guaranteed EDF will be paid £92.50 per megawatt hour, inflation linked for 35 years, for the energy the plant will provide. “We thought that it was extraordinarily expensive,” says Lord Hollick. “Where is this technology up and running? Where is it proven? It’s either over budget or over time – or both.” The Lords also call for the government to publish a contingency plan in case Hinkley Point C is delayed.
BBC 24th Feb 2017 read more »