Stop grandstanding and address the real problems

The bosses of the big six energy firms were subjected to a public mugging by the Decc committee last week. From the moment the call for questions went out on Twitter, it was clear that this was to be more show trial than select committee. To no-one's surprise, the executives did not acquit themselves well. Once more the national media was filled with vitriolic headlines and the battered relationship between utilities and the public took another body blow.

There is a lot wrong with the energy market, and it is right and proper that energy companies should be called to account and required to explain themselves. It is also sensible that the government and energy suppliers should work together to develop a better solution. But that’s not what’s happening here. This isn’t about fairness and the best deal for customers. It’s about grandstanding and political point-scoring.

It’s only going to get worse. Labour has already put energy in the frame for the 2015 election with its pledge to abolish Ofgem if it wins power. It says it will also reintroduce a power auction in a bid to bring transparency to the profits of vertically integrated companies and open up the market to smaller players. Meanwhile, Tory strategist John Penrose is hatching plans to increase competition and push down bills. His ideas are likely to be included in the Conservative manifesto, placing energy firmly front and centre in the 2015 election.

Amid the bluster, the country is hurtling headlong into a once-in-a-generation change in the energy mix in a bid to meet European sustainability directives. But it’s not working. As we report this week, investment in renewable energy is actually falling year on year. Old sources of generation are being taken off stream without the introduction of new ones to replace them. Talk about unsustainable.

This is the context in which the big six are operating, and the reason for rising bills. The European targets were introduced in a radically different economic landscape and most experts accept that they are no longer achievable. Coal is dirt cheap – and last week’s vote in Strasbourg rejecting plans to bolster the price of carbon under the EU ETS indicates that it’s going to stay that way. Can the UK really afford to run down and switch off coal-fired power stations when it hasn’t got affordable alternatives lined up? That’s the conversation we should be having at the top of our lungs.

Ellen Bennett

This article first appeared in Utility Week’s print edition of 26th April March 2013.

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