Liz Truss To Cap the Wholesale Price of Gas

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

Via Net Zero Watch:

Liz Truss has taken office as Britain’s new prime minister and will on Tuesday finalise a £100bn package to address the UK’s energy crisis by capping the cost of gas to bring down bills for households and businesses.
The measures are the priority for Truss, who was appointed by Queen Elizabeth at the monarch’s Balmoral estate in Scotland on Tuesday after beating her rival Rishi Sunak for the Conservative leadership.
Under the plans being worked on by the Treasury, the UK government would subsidise the wholesale cost of gas allowing suppliers to cap the price of energy to households and businesses, leaving taxpayers exposed to any further surges in energy markets.
Truss’s team said the package would provide protection from the biggest energy shock for decades, preventing mass corporate casualties and keeping millions of households out of fuel poverty. It is not clear whether the caps for households and businesses will be set at the same level.
One senior official confirmed that Truss’s team was drawing up the plans ahead of a potential announcement on Thursday: “There will be a cap, freeze or guarantee on the wholesale gas market,” he said.
She will address the nation as PM for the first time in a speech from Downing Street at about 4pm, after which she will begin to name her cabinet.
The rescue package will be a huge challenge for Britain’s straitened public finances since Truss has also promised tens of billions of pounds of tax cuts. It would be paid back either through consumer bills or taxation over the long term.
The relief package was discussed on Monday night by energy executives and Jacob Rees-Mogg, who is tipped to be the next business secretary.
Capping gas prices would lower wholesale electricity rates. About 40 per cent of Britain’s electricity is generated by gas-fired power plants, which tend to set wholesale rates for the rest of the market, even though other technologies such as wind produce power more cheaply.
In the long term, Truss’s new government wants to decouple electricity prices from gas entirely, a policy the EU is also pursuing.
Brussels is also recommending that EU member states take emergency measures to cap wholesale gas prices.

Full story

This is actually one of the options I have been considering. It has the great advantage that, by reducing electricity wholesale prices, it puts an end to the windfall profits being made by renewable energy firms and other non=gas generators.

As such it is a much cheaper way of subsidising electricity (and gas) markets than the solutions already put forward by both the government and opposition parties.

It is, of course, also a much simpler solution than radically remaking the energy markets in the way I have recently laid out. Though this is something which will need to be done sooner or later, it would not address the immediate problems.

In the long run, of course, we need to begin boosting domestic supplies of gas.

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Admin
September 7, 2022 2:07 am

Price controls = scarcity. The suppliers will simply divert their product elsewhere, where they can get a better deal. If Truss uses the hundred billion as a direct subsidy on purchases, she’ll bleed Britain’s public finances for no long term gain.

Her call for an EU wide price cap on gas, I mean there’s a global gas shortage, and Europe is not the only block which is desperate for gas. You don’t have to be Einstein to figure out what would happen next.

If this cap / subsidy was part of short term plan while Truss got fracking up and running in Lancashire or Gatwick I’d be a lot more sympathetic.

Last edited 26 days ago by Eric Worrall
Editor
Reply to  Eric Worrall
September 7, 2022 2:37 am

I don’t think it’s a price cap on suppliers, which would indeed be the disaster you describe. I think it’s a government subsidy that keeps the wholesale market operating properly but caps the price to consumers. ie, the government pays the difference. Yes it will bleed the UK’s public finances, but they can’t go on the way they have.

Ideally, Liz Truss’s government would end all renewables’ subsidies and mandates, and instruct the system operators to source their energy from wherever is cheapest and most reliable and efficient. At the same time, they would tell all energy suppliers and potential energy suppliers that their energy would not be rejected on any ideological grounds, and in particular that fracking applications would be approved instantly. If the renewables’ subsidies were so cemented into legislation that they can’t be ended, then the government can simply pay equivalent subsidies to all other suppliers so that the playing field is levelled. Yes, that’s very expensive, but it would fix the problem pretty fast. ie, the government wouldn’t be paying out large mounts for very long.

Another thing Liz Truss needs to get done in parallel, in order to ensure that the mess really can get cleaned up and stay cleaned up, is a massive public information campaign to explain to everyone why renewables can’t work beyond some minor percentage of total energy, and thus why the green madness failed. Maybe a public competition with prizes for finding creative uses for dismantled wind turbines and solar panels would be fun icing on the cake.

Admin
Reply to  Mike Jonas
September 7, 2022 2:51 am

That would be my “direct subsidy on purchases”. What will suppliers do when they see the government underwriting purchases?

If this is a very short term plan, it’s a master stroke. But for Britain’s sake she better start making announcements PDQ

Last edited 26 days ago by Eric Worrall
HotScot
Reply to  Eric Worrall
September 7, 2022 5:17 am

If this is a very short term plan, it’s a master stroke. But for Britain’s sake she better start making announcements PDQ.

I suspect that’s the idea, with the only lever available, as far as I can see, being fracking.

However, the renewables businesses which chose not to adopt CfD’s and instead exploit the current crisis to take advantage of escalating energy costs will not be looked on favourably by this government. Watch for a backlash in the future.

I suspect the gloves are about to come off because, if they don’t, the 2024 general election will be a Conservative party blood bath.

Yirgach
Reply to  HotScot
September 7, 2022 10:20 am

Well Chicago, when facing a similar situation, started selling off it’s public property like parking meters, rail lines, highways, etc.
Now what about all them pretty castles we see around the countryside?
They must be worth something to somebody? Be a real shame if something happened to them.

HotScot
Reply to  Yirgach
September 7, 2022 3:06 pm

Look at the state of Chicago. I mean, Lightfoot is hardly a paragon of fiscal responsibility.

Richard Page
Reply to  Yirgach
September 7, 2022 3:47 pm

Them ‘pretty castles’ seen around the countryside ARE worth something to somebody – their owners; who are, almost exclusively, NOT the UK government. There are, however, 13 US airbases we could sell off to private investors to raise a bit of cash.

DonM
Reply to  Richard Page
September 8, 2022 12:33 pm

US taxpayer saves money.
UK govt makes money.
Europe/UK step up & take defense responsibility for themselves, so self-esteem improves.

Everybody wins.

Richard Page
Reply to  HotScot
September 7, 2022 3:41 pm

That gives Truss about 18 months to turn things around and prepare for the election – not a lot of time when Starmer and the green idiots will start wailing and gnashing teeth over imagined heresies. Going to need a very good pr campaign.

Reply to  Eric Worrall
September 7, 2022 6:14 am

The suppliers sell more energy when their customers are subsidized.

Drake
Reply to  Richard Greene
September 7, 2022 11:01 am

EVERY “seller” sells either more or at a higher price or both when subsidized.

See: Windmill and solar suppliers. More sold at higher prices.
US “higher” education. Higher tuition prices with lower quality output.
“Vaccine” manufacturers. Massive sales through forced government mandates AND massive profits from government subsidies for the producers.
Add your own examples here.

Rich Davis
Reply to  Richard Greene
September 7, 2022 7:04 pm

Maybe, but you missed the point. In the US, university tuition was perceived to be unaffordable. Subsidized loans and direct grants were implemented. Now university tuition really is unaffordable.

When government subsidies go in, prices go up.

HotScot
Reply to  Mike Jonas
September 7, 2022 5:10 am

Ideally, Liz Truss’s government would end all renewables’ subsidies and mandates, and instruct the system operators to source their energy from wherever is cheapest and most reliable and efficient.

Doubtful, too many legal hurdles.

Fran
Reply to  HotScot
September 7, 2022 9:31 am

Bjorn Lomberg pointed out that if all political promises had legal standing, all would have to be funded. Seems to me possible to argue that promises made by previous governments were not binding.

HotScot
Reply to  Fran
September 7, 2022 3:07 pm

Possibly, but hardly the right time to be entering into decades long court cases over the theory.

Richard Page
Reply to  HotScot
September 7, 2022 3:49 pm

Solar would be the easiest low-hanging fruit in that scenario; best way of testing the waters for wind at some later date.

Duane
Reply to  Mike Jonas
September 7, 2022 5:57 am

Any “fix” that simply subsidizes the prices of a commodity in at least temporarily short supply doesn’t address the underlying problem, which is an artificial shortage imposed by Russia’s war on Ukraine.  Eventually that war will end, Putin won’t live forever (maybe not to the end of this year, one would hope), and eventually the natural gas supply situation will be normalized.
Long term, Russia has proved itself an unreliable energy supplier, so Europe certainly needs to develop more stable energy supplies – both in terms of natural gas, and in terms of nuclear power.  Renewables are OK as a supplemental source, but cannot form the baseload energy supply for the UK or the world, no matter how much wishful thinking by the warmunista bureaucracy.

Reply to  Duane
September 7, 2022 7:15 am

The shortage caused by the Russian supply disruption is minor. Its the break down in the wests production that is the real issue, its just as dumb as the 70s reliance on the middle east. The west has plenty of usable supply but they have brainwashed them selves into the green energy nonsense and seeded the most critical security item to unreliable and sometimes outright adversarial third parties. Its stupid and its time to wake up.

JamesD
Reply to  Duane
September 7, 2022 8:59 am

Do you understand that Putin, Mevdevev, and Lavrov are all Western leaning moderates in the Kremlin, right? If Putin were actually overthrown, the people replacing him will likely nuke Warsaw, Berlin, and London.

KcTaz
Reply to  JamesD
September 7, 2022 1:07 pm

No, I don’t understand that but I would like to know what facts you are using to form your opinion.
It’s an interesting idea but one I’ve never heard before. Plus, how do we know who the Politburo will choose for a new leader? I expect it will be a battle royal but maybe he has already been chosen by Putin?

Rich Davis
Reply to  KcTaz
September 7, 2022 7:15 pm

Politburo? That ended more than thirty years ago. Theoretically Putin is a democratically elected leader who would be replaced in an election. Not saying it would be free and fair, but in theory at least, multiple parties exist.

Whoever runs Russia, they will need to keep the export of fossil fuels going or the oligarchs will “suicide” them.

It doesn't add up...
Reply to  Duane
September 7, 2022 9:05 am

We were seeing shortages long before the war. The cause is greens suppressing the development of new supply.

Robert of Ottawa
Reply to  Duane
September 7, 2022 9:17 am

Wrong. It’s an artificial shortage created by Western governments war on energy.

ThinkingScientist
Reply to  Mike Jonas
September 7, 2022 6:08 am

Even though I am a Conservative at heart, I would pass emergency legislation to force wind & solar to prevent them competing in the spot market – give them fixed rates of say £100 / Mwh. If they squeal, point to the new wind auction bids and tell them they will get their contract rates only in future.  That would send the right message.

HotScot
Reply to  ThinkingScientist
September 7, 2022 6:32 am

CfD’s were agreed with the UK government around £75Mwh but when this crisis hit and Hornsea opened, they decided not to ‘take advantage’ instead selling at global market prices of around £200Mwh.

Most renewable organisations are expected to follow this price gouging.

But wind is the cheapest electricity evah!

Robert of Ottawa
Reply to  ThinkingScientist
September 7, 2022 9:19 am

I would pass emergency legislation to build nuclear reactors, coal fired power stations and fracking, and eliminate immediately all green subsidies.

KcTaz
Reply to  Robert of Ottawa
September 7, 2022 1:09 pm

That’s a great idea, Robert, but way too sensible in today’s world of hysterical climate change propaganda.

HotScot
Reply to  KcTaz
September 7, 2022 3:12 pm

What do we do for heat and light during the five years it takes to build just one brand new coal fired power station?

HotScot
Reply to  Robert of Ottawa
September 7, 2022 3:11 pm

Great. So whilst the country freezes to death, quite literally, with business failing within months because of energy bills of 10 times what they were 18 months ago, were going to propose opening a brand new coal power station in five years time.

Thankfully you’re not in a position to propose legislation, emergency or otherwise.

Izaak Walton
Reply to  ThinkingScientist
September 7, 2022 1:33 pm

 give them fixed rates of say £100 / Mwh” says the “Thinking Scientist”. I am sure wind farm operators would love that given that at the last auction they were selling electricity at just over 37 pounds per MWh.

Galileo9
Reply to  Mike Jonas
September 7, 2022 7:54 am

The subsidy on renewables has already ended according to Bloomberg and in fact are paying money back! The irony is that renewables are only economic when the price of fossel fuels is high. Don’t shoot the messenger, I think it’s crazy too. https://www.bloomberg.com/news/articles/2022-01-13/high-power-prices-mean-wind-farms-are-paying-the-u-k-government

MarkW
Reply to  Galileo9
September 7, 2022 8:22 am

The biggest subsidy has always been the requirement that power companies buy whatever the so called renewable suppliers produce, whether it is needed or not.

KcTaz
Reply to  Galileo9
September 7, 2022 1:13 pm

From your link.
Normally, U.K. energy suppliers have to pay a fee to subsidize the country’s growing fleet of offshore wind farms and other subsidized renewable power generators. But because of a massive surplus, suppliers will actually receive 39 million pounds ($53.5 million), rather than having to pay a fee.”
Interesting. I wish they would, also, charge windfarms for the fossil fuel running 24/7 to back them up. 

Galileo9
Reply to  KcTaz
September 7, 2022 1:36 pm

Yes, I know that’s what I find crazy. Renewables economic because the price of fossel fuels are in short supply because governments have prioritised renewables.

Tim Gorman
Reply to  Mike Jonas
September 7, 2022 1:41 pm

I think it’s a government subsidy that keeps the wholesale market operating properly but caps the price to consumers. ie, the government pays the difference. Yes it will bleed the UK’s public finances, but they can’t go on the way they have.”

All this does is allow the suppliers to raise their prices. It’s no different than the US rebates on EV’s. The EV makers have just raised their prices the same amount. The consumer still pays the same amount. It’s no different than Biden’s student loan forgiveness, it just allows universities to charge $10K more in tuition since the government (i.e. the taxpayers) are going to make it up!

ATheoK
Reply to  Mike Jonas
September 7, 2022 2:09 pm

will on Tuesday finalise a £100bn package to address the UK’s energy crisis by capping the cost of gas to bring down bills for households and businesses.”

 I think it’s a government subsidy”

Indeed.
Now, alarmists will finally have a fossil fuel subsidy they can point to while claiming that said fossil fuel subsidy justifies renewable subsidies.

That “£100bn package” won’t last long subsidizing LNG for households and businesses. Or does Liz’s subsidies only kick in at a high price point?

HotScot
Reply to  ATheoK
September 7, 2022 3:14 pm

It’s not a subsidy FFS!

Learn the difference between support and subsidy!

Simonsays
Reply to  HotScot
September 7, 2022 4:31 pm

But you posted its a subsidy. Huh.

MarkW2
Reply to  Eric Worrall
September 7, 2022 3:40 am

To be fair — and blunt — Truss has no choice. The entire energy market’s such a mess, driven primarily by crazy net-zero targets and Putin’s subsequent war — that there are no easy fixes.

The benefit of Truss’s plan is that it will reduce inflation, first, because domestic energy prices are just pushing inflation up relentlessly; and, second, because this approach won’t increase the money supply.

If she can increase UK gas and oil production, which I believe she’ll do dramatically, this will ease pressure on the energy supply side. We need Biden to follow suit, of course, but he’s not going to do that given his blinkered approach.

Truss’s plan at least offers an opportunity to grow the UK economy again, which is desperately needed. World energy prices will only stabilise if and when all G7 countries realise we’re going to need fossil fuels for a long time to come and increase production accordingly.

It’s going to be a long, hard struggle but Truss’s plan is at least aiming in the right direction.

Admin
Reply to  MarkW2
September 7, 2022 3:51 am

The Truss plan will only work for a few months, a year at most, before it gets played by bankers. So what is Truss going to do with this time?

Reply to  Eric Worrall
September 7, 2022 4:31 am

Eric. What Jacob Rees Mogg and Liz Truss appear to be doing, and its all still under discussion, is this

  • Liz Truss and the Chancellor are going to borrow, or underwrite loans to energy companies, to ease the pain of the coming winter.
  • Meanwhile the Moggster is in talks with the oil companies as to how to extract as much oil and gas and as much frackable hydrocarbons from the North sea and or under the UK
  • Discussions as to how quickly and at what cost reopening the Rough gas storage facility are under way.
  • “Squeezing “every last cubic inch of gas” from the North Sea, re-starting fracking, rejecting windfarms in favour of fossil fuels – the policies espoused by Jacob Rees-Mogg, against a backdrop of rising energy prices, form a clear indication of how the new business secretary will view his brief.” (Guardian).
  • Obviously long term if the gas runs out and puts windfarms off the menu it’s going to be nuclear. And no doubt that will happen in due course. It hasn’t been getting nearly as much subsidy as wind, but the UK based Rolls Royce consortium and several other companies asociated with advanced nuclear power are in receipt of reasonably substantive grants.

Obviously the press is full of the short term measures and the medium term strategy, and howls from exploding Left/Green heads about appointing a man who thinks that high energy prices are ‘because renewables’ as much as ‘because Putin’.

Like Trump, Truss and Co (and its clear this is a team effort) are actually Doing Stuff, not just theorising, moralising, and throwing taxpayer money at Princess Nut Nut’s cronies.

Longer term once you eliminate all the wrong solutions there is only nuclear power, and that itself will require a massive change in how civilisations operate. Road transport and air transport will simply become hugely more expensive. Expect investments in nuclear ships and railways.

But I think that Truss & Co whilst not immune from false steps, are actually taking the first steps towards sanity and a 21st century policy.

And I am expecting every single false accusation that was thrown at President Trump to be thrown at her. She will be lucky to survive. I hope she does. So far it’s looking rather good.

This is a right wing cabinet, and the Liberal Left Establishment senses its days are numbered if she isnt removed.

HotScot
Reply to  Leo Smith
September 7, 2022 5:20 am

100%!!!!

HotScot
Reply to  Leo Smith
September 7, 2022 5:26 am

Not out the woods but at least it looks like Truss is heading in the right direction.

She needs to be as thick skinned as DJT though and that will be tough. When Germany see’s the UK succeeding they will do everything they can to scupper any success.

fretslider
Reply to  Leo Smith
September 7, 2022 5:31 am

It all sounds very impressive. 

I don’t buy it. I wish I could. There needs to be a change in legislation (Net Zero) and I don’t see that on the horizon, do you?

This is a right wing cabinet”

Accounting for the leftward shift in politics over the last 20 to 30 years, they are what we used to call a centrist/centre right  government.I

Last edited 26 days ago by fretslider
Frank from NoVA
Reply to  fretslider
September 7, 2022 6:19 am

‘I don’t buy it. I wish I could. There needs to be a change in legislation (Net Zero) and I don’t see that on the horizon, do you?’

I agree re. the need to change the legislation, but that just won’t happen if they attempt to use subsidies to kick the ‘pain’ can down the road.  Instead, they should go really loud and early with the fact that Net-Zero is pursuant to a fraudulent CAGW narrative, and like all legislation based on fraud, needs to be repealed asap.

HotScot
Reply to  fretslider
September 7, 2022 6:36 am

NetZero can be shuffled into the long grass. When was the last time you heard of a government official being punished for not achieving a political ‘law’?

I’ll answer that for you. Who would be locked up if the UK doesn’t achieve its objective of NetZero by 2050? Theresa May, who introduced the legislation? Boris? Liz Truss? the next PM, or the opposition PM who might be running the show in 2050, who shrugs its/their shoulders and says “we didn’t agree with it in the first place”?

Accounting for the leftward shift in politics over the last 20 to 30 years, they are what we used to call a centrist/centre right government.

We have to start somewhere.

Richard Page
Reply to  HotScot
September 7, 2022 3:56 pm

Read the Climate Change Act (2008) – that needs to be amended or dismantled before Net Zero can be successfully hidden in the weeds.

Reply to  fretslider
September 7, 2022 8:40 am

Yes, back in Macmillan’s day this would have been very middle of the road. Ordinary conservatism.
The Net Zero things has been parked. It will fade towards being ‘aspirational, not policy’
Politics is the art of the possible. You cannot go againts what huge swathes of people believe in, on the other hand how many voters still believe – or ever believed – in net zero? The water will be tested, kites will be flown..

I thnk my conclusionis after Day One, that I can see where this government wants to go, but how far it will be able to travel is yet to be seen.

KcTaz
Reply to  fretslider
September 7, 2022 1:17 pm

Accounting for the leftward shift in politics over the last 20 to 30 years, they are what we used to call a centrist/centre right  government.”
Well said, fret, and spot on!

HotScot
Reply to  MarkW2
September 7, 2022 5:18 am

Excellent analysis.

Reply to  MarkW2
September 7, 2022 6:00 am

Russia is Europe’s largest supplier of natural gas, providing around 35 per cent of the gas used across the continent. The UK’s reliance on Russian gas is far less significant, at just 3 per cent.
Aug 4, 2022

Reply to  Richard Greene
September 7, 2022 7:21 am

RIchard

Its a global market it doesn’t matter where it comes from prices are driven up and down globally. You can play games all you want but supply and demand rule, its every bit as inevitable as death and taxes. No amount of sodalist double speak changes that.

Reply to  bob boder
September 7, 2022 8:43 am

Ther are two aspects, price, and availability.

For example USA has loads of gas, but cant get it to Europe due to lack of transport facilities.

Germany is having trouble getting gas at ANY price.

UK has good import facilities and is well placed geographically to import and re -export to Europe mainland

Reply to  Leo Smith
September 8, 2022 2:25 am

Europe also has loads of gas they choose not to develop it for political reasons. They blinded them selves with ideology and are now paying the price, However if they decide to develop those resources now it would be a matter of \ 1 to 2 years before they could rectify the situations. This was all proved in the mid 2000s when democrats told everyone that we couldn’t drill our way out of the oil limitations and that we were forever dependent on the middle east. that took less then 2 years to be proven totally wrong. the supply is there and if the market had been allowed to rule none of this would be an issue. Its the attempts to control and manipulate the market that has caused the problem and government manipulations are not going to solve it.

Archer
Reply to  bob boder
September 7, 2022 8:45 am

Not quite. While gas is technically fungible, there are practical and geographical limitations on that fungibility. If it were a truly fungible commodity, then Russia switching its sales from Europe to China and India would keep the price from rising over anything other than the very short term, but that isn’t happening. The reason is simple: there isn’t enough capacity. Russia doesn’t have the pipeline capacity to sell to China at the same level it was selling to Europe, nor does it have access to LNG terminals that could compensate for that lack of pipeline capacity.

What this means is, while the gas contracts might be there, the actual gas supply itself isn’t, meaning that China and India are still drawing on previous gas resources. This, in turn, restricts the existing supply, forcing prices up higher than the would be if the Russian gas were able to flow freely to those countries.

As you say, supply and demand rule. Russia can’t supply sufficient gas to meet the demand of its new customers. The global price consequently remains high.

Reply to  Archer
September 7, 2022 12:12 pm

@Archer, it really wouldn’t make that much of a difference even if the infrastructure was there. Price is very much a product of where something comes from – and how it gets there.
Look at prices in Hawaii and Alaska for just about anything. (Including transport fuels in Alaska – sixth highest average gasoline price in the country – even though they have crude coming out of their ears, they don’t have the refineries.)

Editor
Reply to  Archer
September 7, 2022 1:23 pm

Good points. Would Russia have provocatively burnt all that gas if they could instead have sold it to China. What might have looked like strength was actually weakness.

JamesD
Reply to  MarkW2
September 7, 2022 9:02 am

How does this not raise the money supply? Where’s the 100 Billion in sterling coming from?

Ben Vorlich
Reply to  JamesD
September 7, 2022 9:43 am

Going to be borrowed.
The UK has a long history of borrowing to fund wars.
On 31 December 2006, Britain made a final payment of about $83m (£45.5m) and thereby discharged the last of its war loans from the US. By the end of World War II Britain had amassed an immense debt of £21 billion.
The debts from WW1 were finally paid in 2015
Chancellors Alistair Darling and George Osborne were responsible for clearing those debts
In 1815, at the end of the Napoleonic Wars, British government debt reached a peak of £1 billion (that was more than 200% of GDP)

We technically haven’t finished paying for the South Sea Bubble.

After we’ve borrowed to fix the price of energy for a year the National Debt will be just over 100% of GDP

Reply to  MarkW2
September 7, 2022 11:55 am

Hmm. Just how will this avoid increasing the money supply? Is the Truss government going to raise taxes by an amount equal to the subsidies? Or has she found a way to sell government debt without a discount – or accruing interest? (I hope that she doesn’t assume the energy companies will just stuff the subsidy money into their mattresses. Although “Progressives” are that stupid sometimes…)

commieBob
Reply to  Eric Worrall
September 7, 2022 4:12 am

When I read the headline, my first reaction was that price controls fail. It’s one of those things where there is lots of real world experience. It’s the kind of thing that should be known by any semi-thinking warm body who’s been paying any kind of attention for a few decades. link

The first thing anyone proposing a price cap has to do is to explain how their version is different in a way that will keep it from failing.

Anyway, I’m totally not surprised that the first comment on the story points out that price controls fail.

HotScot
Reply to  commieBob
September 7, 2022 5:29 am

It’s not price control, it’s a subsidy, taxpayers are being asked to pay the bill short term. As much as I hate the idea we have to stop people dying this winter from fuel poverty.

The proviso being, of course, energy needs to be found domestically and this scheme ends after winter is over.

commieBob
Reply to  HotScot
September 7, 2022 6:04 am

As much as I hate the idea (of the proposed policy) we have to stop people dying this winter from fuel poverty.

Fully agree.

Your proviso that energy needs to be found domestically is the difference between success and disaster. In that regard, I’m waiting for the other shoe to drop.

HotScot
Reply to  commieBob
September 7, 2022 6:40 am

We have the north sea and we have fracking. One company has said that if given the green light now it could have fracked gas flowing by January.

Ben Vorlich
Reply to  HotScot
September 7, 2022 9:51 am

There are large oil and gas fields west of Shetland, the Halifax field is huge from what I read a while ago.
Any oil company developing new fields will need some sort of guarantee of return on investment. Come January the EU in the shape of Germany, France and Benelux might be prepared to make that commitment.

AndyHce
Reply to  Ben Vorlich
September 7, 2022 3:50 pm

Not too many years ago an article seemed to say a venture to produce gas from coal was about to begin; then coal mining was declared illegal in th UK before anything actually happened. The article was short on technical details but, as I understood it, the ‘mining’ was actually horizontal drilling and hydraulic fracturing of what were claimed to be very large off shore coal fields in the north sea. It seemed to say the company was confident of its operation and also that conventional coal mining under the ocean (starting from on shore) had been successfully done for a considerable time.

It appeared to me they were going to drill and frack large tracks, then convert the coal to gas in place, then pump out the gas. A statement was made that (if I remember correctly) if they were able to recover just 1% from the know coal fields, they could supply all of the UK’s needs for the next 300 years.

Frank from NoVA
Reply to  HotScot
September 7, 2022 6:34 am

‘The proviso being, of course, energy needs to be found domestically and this scheme ends after winter is over.’

And not just natural gas – coal and nuclear have to be on the table, as well.  Oh, and no fingers on the scale for renewables.


Reply to  Frank from NoVA
September 7, 2022 8:46 am

The reality is that UK has (almost) no coal left worth digging up. It’s way cheaper to import US or Australian coal.

Nuclear is on the cards, but its at least 5-10 years away from replacing gas.

Whatever policies are in play today, have to address the next two years.
Nuclear will be the next government’s baby.

HotScot
Reply to  Leo Smith
September 7, 2022 1:51 pm

Good comment.

Izaak Walton
Reply to  HotScot
September 7, 2022 1:38 pm

The proviso being, of course, energy needs to be found domestically and this scheme ends after winter is over.”

Are you proposing to force companies to sell energy cheaply to the UK rather than selling it at the market price internationally? If not increasing UK oil and gas production is not going to do anything to bring the energy prices down in either the short or long term.

HotScot
Reply to  Izaak Walton
September 7, 2022 1:58 pm

I’m not proposing anything. I’m saying that the government might be able to do a deal with fracking companies generating gas from British soil to sell it domestically at prices favourable to the UK.

It would be a short term agreement perhaps, until the country is out this mess. Then things go back to normal.

What would be the point in allowing domestic gas to be fracked, to be sold at international market prices within the UK, only to be paid for by the taxpayer anyway?

Why should the UK citizen pay for Germany’s (and others) refusal to exploit their own fracked gas reserves? All we would be doing is propping up the European NetZero insanity.

If they wan’t to get out this mess they can frack for their own damn gas!

HotScot
Reply to  Eric Worrall
September 7, 2022 5:08 am

If this cap / subsidy was part of short term plan while Truss got fracking up and running in Lancashire or Gatwick I’d be a lot more sympathetic.

I suspect that’s the objective. One fracking company has said that if it get’s the green light now it can be producing fracked gas by January.

I also note that very few, if any, of Truss’s newly appointed cabinet have voted against fracking policies to any meaningful degree. Similarly, they have nearly all voted against climate policies to a greater degree. (I have been through most of their voting practices over the last few years, as far back for some as 12 years).

Suella Braverman and Kemi Badenoch are vocal in their objections to climate policies. Jacob Rees-Mogg has also voiced his criticism (how can you predict the climate when you can’t predict the weather) and terrifies the opposition in the HoC.

The moron and chair of Cop26, Alok Sharma, who cried tears of joy over the event is nowhere to be seen.

The ‘price cap’ seems to be another government bail out for the public in that government’s paying the bills. Not ideal but if fracking can get going rapidly, and depending on the deal struck with Cuadrilla etc., then we just might get out this relatively unscathed.

If not, we just descend into socialist hell.

Reply to  HotScot
September 7, 2022 8:48 am

if not, we just descend into socialist hell.

Never mind. We can always eat our pets

commieBob
Reply to  HotScot
September 7, 2022 10:19 am

I have a question. This link says the UK gets a mere 3% of its natural gas from Russia.

Am I correct in thinking the UK price of gas is due the international price rather than anything to do with what’s happening in the UK.

In light of the above, it seems to me, and correct me if I’m wrong, that a little extra fracking wouldn’t solve the UK problem.

If the UK could be entirely self-sufficient in natural gas, and it could shut off the pipes to elsewhere, that would be a different kettle of fish.

Last edited 26 days ago by commieBob
Editor
Reply to  commieBob
September 7, 2022 1:32 pm

I think the answer is that gas is not a truly international market – you can only move gas to and from places and in quantities for which transport is available, The price of gas in the USA is I think quite different to the price of gas in Europe, for example. If the UK opens up large gas production for itself, the price of gas in the UK should fall a lot, even if the producers are free to sell to Europe too – that’s because they can’t yet transport large quantities of gas to Europe.

Russia burning off all that gas could illustrate this: would Russia have burned it off if they had the means of selling it to China?

HotScot
Reply to  commieBob
September 7, 2022 2:00 pm

We buy a lot of gas from Norway we pay for at international market prices.

Reply to  Eric Worrall
September 7, 2022 5:52 am

Exactly as expected from a leftist in response to high prices
Spread the costs among all the taxpayers. and maybe they won’t notice? Deficit spending first. Then have the central bank offset the new deficit spending by purchasing government bonds. Then blame the resulting price inflation on “Putin”. No one will figure it out, at least not those with a public school education.

Last edited 26 days ago by Richard Greene
Reply to  Richard Greene
September 7, 2022 6:12 am

Consumers will obviously use more energy if the price is subsidized.
Does the energy subsidy deficit spending continue forever?
Does the central bank finance it indirectly forever?
Does the high inflation rate continue forever as a result?
High inflation is a tax on everyone who buys goods and products.

How does a short-term band-aid become a long-term solution ?

Not that I want UK people to freeze this winter.
I suspect some UK commenters here will significantly benefit, at least this winter, from energy subsidies, which may bias their comments.

Americans loved their Covid subsidies in 2020 and 2021 but then hated the price inflation that Covid stimulus deficit spending led to in 2021 and 2022.

HotScot
Reply to  Richard Greene
September 7, 2022 6:42 am

Pay attention.

Ben Vorlich
Reply to  Richard Greene
September 7, 2022 10:11 am

Energy is still going to be expensive in the UK and businesses are not included yet. The price is going to be fixed at the current level, including £400 already in the pipeline, The difference between the current cost and the proposed rise in October is going to be paid by loans taken out by the government on the taxpayers over many decades.
The price cap will be 80% higher than January 2021.I can’t see anyone using more energy than is absolutely necessary in that case.
Short term pause until March to buy time to ditch Net Zero in all but name and develop existing North Sea oil and gas and start fracking will mean there’s a year until the problem raises its head again

jeffery p
Reply to  Eric Worrall
September 7, 2022 9:55 am

It’s a subsidy, not price control.

Be that as it may, subsidies tend to make things more expensive. I’m curious to see if the Truss government will get out of the way and take the boot off the neck of energy producers.

HotScot
Reply to  jeffery p
September 7, 2022 3:20 pm

It’s a subsidy, not price control.

It’s neither.

son of mulder
Reply to  Eric Worrall
September 7, 2022 2:08 pm

Truss is between a rock and a hard place. We’ve had 25 years of UK governments sacrificing Energy Strategy and Security on the altar of Green Religion and anti-nuclear fanaticism. Many Thousands of small businesses will go bust very quickly if her safety net isn’t put in place until she can get a sensible level of energy independence. Call it a war footing because that is what it is in reality, but Putin is only the straw that broke the camel’s back. Right the way back to Blair stopping nuclear power followed by Clegg in the Lib-Con alliance under Cameron, followed by Fracking being stopped under the same alliance of nutters by Ed Davey. There are times when markets are broken (this time by successive, myopic European governments) that unilateral government action is needed. Hopefully she’ll get fracking and drilling and building nuclear as soon and as quickly as possible so we can get back to a balanced, sound UK energy market and strategy. At least we’re out of the EU box of frogs.

HotScot
Reply to  son of mulder
September 7, 2022 3:21 pm

Spot on.

Michael S. Kelly
Reply to  Eric Worrall
September 7, 2022 5:08 pm

Price controls = scarcity.”

The most dramatic empirical proof of this was the result of President Reagan’s abrupt ending of price controls on domestic petroleum. The United States had been suffering under gasoline shortages for much of the 1970s, principally because price controls interfered with the stabilizing effect of the price mechanism in our economy. It was made worse by imposition of “windfall profits” taxes on U.S. oil companies whenever the government would approve a price increase, and by our being in an inflationary period. President Carter had been gradually phasing out oil price controls, and President Reagan initially planned to continue that approach. But some of his economic advisors (I suspect Alan Greenspan was one of them) convinced him that delaying lifting of price controls was pointless, and harmful. So they were removed, and gasoline prices went through a series of swings as the industry geared up to the new market reality. One thing changed, though, and it changed permanently: we never had another gasoline shortage, ever.

Kevin kilty
Reply to  Michael S. Kelly
September 7, 2022 6:54 pm

Plus many for this history, now forgotten completely by the Democrats.

cpratt@telusplanet.net
Reply to  Eric Worrall
September 7, 2022 8:44 pm

There isn’t a world wide shortage of gas. Canada along with many others have more than enough. The governments have chosen to either not drill for it or export it

Stephen Richards
September 7, 2022 2:51 am

It’s the wrong policy


Mark BLR
Reply to  Stephen Richards
September 7, 2022 4:25 am

It’s the wrong policy

Your post appears to have had a few “bytes” taken out of it.

What would be the “right” policy, oh Wise One ?

Reply to  Stephen Richards
September 7, 2022 6:05 am

The policy is not going in the right direction — encouraging domestic energy production — so it must be going in the wrong direction. Wasting time by not going in the right direction. UK has the energy reserves it needs but wants to leave them underground. Who does that?

HotScot
Reply to  Richard Greene
September 7, 2022 6:47 am

Who does that?

The leader of the free world, no less.

Truss is expected to allow fracking. We also have the north sea, that will take more time though.

Please try reading the post’s of others rather than making a clown of yourself by posting uninformed opinions.

jeffery p
Reply to  Richard Greene
September 7, 2022 9:58 am

Who does that? The Grandpa Poopy Pants administration does.

In the short term, this may be the best that can be done. Unfortunately, subsidies tend to never go away.

September 7, 2022 2:59 am

In the short term, such a scheme may make some sense. But in the long term, government meddling with the markets always does more harm than good.

Reply to  Neil Lock
September 7, 2022 4:41 am

Indeed, and in Truss, Britain has somehow managed to get a free market conservative into power.
I don’t think anyone intends (famous last words) this ‘meddling; to be a long term solution. This is emergency first aid, cooked up by Truss and I think Kwarteng. JRM is charged with the long term care of the patient and he is no ‘big government’ man, either.
When Boris was elected I was immediately depressed by his selection of a largely ‘remain;’ cabinet…i hoped that was a peace offering, but in the end what happened was – nothing really.
The only things he got right were a reasonable resposne to covid, given the politics, and a good repsonse to Ukraine. The rest he just left , Brexit isnt finished yet, Energy was drifting into a net zero nightmare, the economy post civid was being strangled by an unimaginative chancellor. Illegal immigration was massive, and the islamification of cities continues.And Woke elements were running riot with no offficial policy to stop them.

Don’t get me wrong. I like Boris. He’s an educated affable sort of chap – great to get drunk with down the pub and talk bollocks with, but as far as actually doing the hard work of assembling a team to run a country, he was, bluntly, effing useless. And his wife….

HotScot
Reply to  Leo Smith
September 7, 2022 5:39 am

The only things he got right were a reasonable resposne to covid, given the politics, and a good repsonse to Ukraine.

Agree with most of your post but Boris’ response to these two events was shockingly bad.

There were legions of scientists and doctors urging him not to lockdown and not to use untested vaccinations on people. He ignored them and the evidence is now clear, lockdowns were a huge mistake and untested ‘vaccinations’ may well prove the Thalidomide of the 21st Century.

Ukraine is a NATO induced geopolitical disaster with the governments of more than half the world’s population opposing intervention by the west.

The only reason Biden provoked Russia and is perpetuating the event is to discredit Trump.

America really must do something about its governance and election oversight. Biden is systematically destroying the country at an astonishing rate. Nor am I suggesting Biden is the only one to steal an election, but the fact he isn’t indicates something is seriously wrong.

Reply to  HotScot
September 7, 2022 6:18 am

Every time people demand that their government “do something”, the problem gets worse. But no one seems to learn the lesson.

HotScot
Reply to  Richard Greene
September 7, 2022 6:55 am

My enduring refrain is that ever time someone says “the gumbint ought to do something about that” is another nail in the coffin of freedom.

Like I have already said, please read other comments before posting. I am dead against government intervention in anything, but more people than usual will die this winter in the UK if the government doesn’t intervene short term.

Fracked gas and north sea gas are (I would bet my bottom dollar) already underway.

The government option can only be short term or we head straight to socialism without passing go.

MarkW
Reply to  Richard Greene
September 7, 2022 11:37 am

The scariest words in the English language are: I’m from the government and I’m here to help.

Ronald Reagan

HotScot
Reply to  MarkW
September 7, 2022 2:02 pm

Absolutely.

Reply to  HotScot
September 7, 2022 8:52 am

I am sorry, Ukraine is not Nato induced.
It is Russian pure and simple.
You have believed Putin’s propaganda. I am ashamed on your behalf.
Putin wants the USSR back and has said so. The Oligarchs wanted the oil coal and gas in the Donbas, and the Black Sea access.
Cui Bono?
Go figure

HotScot
Reply to  Leo Smith
September 7, 2022 2:32 pm

I’m not ashamed of you, I’m laughing at you. The US (NATO) (Biden) provoked Russia by negotiating with Ukraine for membership. Sincere or not is was a threat to Russia.

Russia got wind that supported by NATO training (not in dispute), armed and provisioned by NATO (also not in dispute) Zelensky was about to launch an assault on eastern Ukraine (Donbas for the sake of brevity) and moved troops to the border.

Russia had offered to help Donbas in the past as the area is predominantly ethnic Russian. Western Ukraine attacking it would undoubtedly result in ethnic cleansing.

Whilst Russia was waiting at the border Zelensky mounted a seven day artillery barrage on Donbas with weapons moved from its Kiev base. An act of international aggression. This is also beyond dispute as it was witnessed and recorded by the Organization for Security and Co-operation in Europe (OSCE).

Russia eventually crossed the border into Ukraine to defend Donbas, as it is perfectly entitled to do under article UN 51 which states that any UN nation is entitled to go to the defence of another UN nation under attack, and served it on the UN Security Council. Notably, it does not define regional conflicts therein as excluded from the article.

A couple of things to note. When a force of 150,000 well armed Russian troops are waiting to go to the defence of Donbas, why would anyone in their right mind attack it? Artillery is always a prelude to invasion which in this case would be suicidal.

Instead Ukrainians ran when Russia crossed the Russian/Ukraine border into Donbas. In other words, it was provocation to allow western allies and media to present Russia as invaders.

Russia was never the aggressor here and the proof is quite evident.

Ukraine called for a UN enforced no fly zone which was refused. Why? Because Ukraine is the aggressor here, not Russia. They fired the first shots, not Russia. The UN would be aiding an aggressor by imposing a no fly zone. This is further supported by there not being a single western boot legally on the ground in Ukraine. Ukraine is a founder member of the UN, so does the UN only go to the aid of countries being attacked by nations with no nuclear weapons?

In which case, what will America/UN do if China attacks Taiwan?

It’s also clear that the leaders of more than half the population of the world don’t support the west in this endeavour.

Why do you imagine that the west is irrefutably right to be continuing this proxy war when all the BRICS nations, and more, oppose it?

The region was perfectly stable when Trump was POTUS. Within months of Biden seizing power the writing was on the wall.

Richard Page
Reply to  HotScot
September 7, 2022 4:08 pm

The Ukraine offensive was going to have been in the south, to retake Crimea, not in the east to crush Donbas. If you have a look at the early maps of the invasion, Ukraine had a formation of several divisions positioned just to the northwest of Crimea, between there and Kherson.

jeffery p
Reply to  Leo Smith
September 7, 2022 9:59 am

In the US, subsidies tend to live forever.

HotScot
Reply to  jeffery p
September 7, 2022 2:33 pm

Truss is not proposing subsidies, those come with legal implications. The UK government is only paying the bills for a short term.

SAMURAI
September 7, 2022 3:07 am

Liz is such an idiot…
History has shown government  price fixing is always a very bad idea because it completely distorts price discovery, creates shortages and creates market inefficiencies…

LdB
Reply to  SAMURAI
September 7, 2022 5:38 am

It’s funnier than that if the cap price is below the world market price no-one will sell UK gas … did she fail economics 🙂

jeffery p
Reply to  LdB
September 7, 2022 10:01 am

That’s not what the proposal does. The proposal is for the taxpayers to foot the bill if the whole cost is too high. If it’s not too high, then no subsidy.

HotScot
Reply to  SAMURAI
September 7, 2022 5:39 am

It’s not price fixing, idiot. The taxpayer is footing the bill.

Reply to  HotScot
September 7, 2022 6:20 am

And the ultimate price for subsidies will most likely be a higher inflation rate than otherwise, since the bill for subsidies will not be paid for with higher taxes. It will be financed by the central bank’s monetary inflation. Causing price inflation. That means the poorest families will continue to suffer from price inflation increasing faster than their wages increase for more years. This is very predictable. There is no free lunch.

Last edited 26 days ago by Richard Greene
HotScot
Reply to  Richard Greene
September 7, 2022 7:05 am

Eh!?

If energy cost increases are causing inflation, and the government stops it, by whatever means, how can it possibly affect inflation?

The longer term objective is to lower taxes and stimulate investment and productivity in the country thereby raising more money for the treasury to pay off the debt.

I have been listening to the BS about ‘the poorest families’ since I began working in the 70’s and they are still poor. Stimulate business to get them working and earning better wages and they might not be poor.

The difference between your brain dead POTUS and the new PM is she’s an experienced accountant so knows far more about monetary policy than any previous PM or POTUS I can think of other than Trump. Even Thatcher, who was a Chemist.

Perhaps we might respect someone who actually knows how to count at least by giving her a chance.

John Endicott
Reply to  HotScot
September 8, 2022 7:39 am

Government paying (some of) the bill doesn’t stop energy price inflation, it merely subsidizes it. Energy prices can still go up, government is just tossing money around to cover the difference between price and cap. And as the money that is being tossed around is fresh off the printing press, that will cause some inflation across all segments of the economy, not just the energy sector, so what the consumer “saves” from the government footing the bill, they lose to a rise in prices for everything else.

Last edited 25 days ago by John Endicott
Bill T
September 7, 2022 3:25 am

By capping the cost you make it cheaper to use so you increase demand. But the problem is scarcity, and the gas will not be there. This only works if there is enough to go around.
But if everyone has smart meters, you can control demand. Whole lot of freezing going on.

Editor
Reply to  Bill T
September 7, 2022 3:54 am

To me, that’s negative thinking. By capping the cost you may theoretically increase demand, but the reality seems to be that it will prevent demand collapse. Not cutting suppliers’ incomes, and removing green roadblocks, allows development of more sources – hopefully very rapidly.

The situation is dire and perfect solutions are probably not possible, but it looks like Liz Truss really does understand the situation and really does have a plan that can work. That puts Britain miles ahead of where Boris and Carrie were driving them.

Michael in Dublin
Reply to  Mike Jonas
September 7, 2022 4:34 am

I hope she succeeds because this will put pressure on the Irish government to follow a path of sanity.

fretslider
Reply to  Michael in Dublin
September 7, 2022 5:44 am

The Irish government is bound by EU directives.

Natura 2000 was always going to be big trouble.And it is.

HotScot
Reply to  Michael in Dublin
September 7, 2022 5:47 am

Renewable businesses are price gouging right now. They have not taken up the option of the CfD’s at ~£75Mwh instead taking advantage of the market price of ~£250Mwh.

I don’t think the UK government will forget this and when the backlash comes the Irish will probably benefit.

HotScot
Reply to  Bill T
September 7, 2022 5:43 am

I don’t have a smart meter but the concept of controlling demand, which might mean blackouts, allows them to be shorter, rolling events can be induced at the best possible time to conserve supply.

Not so much with electricity but with gas for heating etc. Not ideal but better than the whole country going dark at the worst possible time.

Captain climate
September 7, 2022 4:14 am

Another conservative in name only.

IanE
Reply to  Captain climate
September 7, 2022 5:27 am

Any other sort left?

HotScot
Reply to  Captain climate
September 7, 2022 5:47 am

The alternative being?

Drake
Reply to  HotScot
September 7, 2022 11:05 am

A true conservative.

HotScot
Reply to  Drake
September 7, 2022 2:34 pm

Who?

John Endicott
Reply to  Drake
September 8, 2022 7:42 am

Care to name a few? An alternative that doesn’t exist is no alternative at all.

fretslider
September 7, 2022 4:16 am

The CCC is frothing…

“Lord Deben and Sir John Armitt, who chair the Committee on Climate Change and the National Infrastructure Commission respectively, wrote to Truss warning that ramping up gas production would not solve the problem.”

https://www.theguardian.com/politics/2022/sep/07/gas-drive-will-not-solve-energy-crisis-liz-truss-told

Oh yes it will…

Right-Handed Shark
Reply to  fretslider
September 7, 2022 5:22 am

It will certainly help, but we also need to have the “renewables” providers paid only for what they produce and penalized when they fail to deliver their promised output. They would be out of town before sunset.

fretslider
Reply to  Right-Handed Shark
September 7, 2022 5:27 am

I would phase them out starting tomorrow.

Reply to  Right-Handed Shark
September 7, 2022 6:26 am

There are times when there is more solar energy available than needed (mid-day sun) and even some times when there is more wind energy available than is needed. Who pays for that?

HotScot
Reply to  Richard Greene
September 7, 2022 7:08 am

How long does the mid day sun last?

From 6am to 6pm when solar is roughly zero, the rest of the time it’s either climbing or descending.

That’s assuming one lives in an ideal place, unlike the UK which has around four to six hours of daylight in mid winter.

Reply to  HotScot
September 7, 2022 8:55 am

You can look at summer to winter insolation in the UK,. Its about 10:1

Essentially solar might as well not exist till spring 2023.

Solar and wind right now are generating less than coal and wood burning.

Right-Handed Shark
Reply to  Richard Greene
September 7, 2022 7:44 am

griff? Is that you? I have yet to see a day when solar produced any excess at all at these latitudes, even during the “heatwave” in July. And there are many times when solar produces nothing for days on end, and wind produces less than 1% of demand, yet the “providers” get paid anyway. Then there are days when wind produces more than required and we pay them to shut down the windmills. They are parasites, and the only thing they provide reliably is instability.

Last edited 26 days ago by Right-Handed Shark
MarkW
Reply to  Richard Greene
September 7, 2022 8:29 am

Ideally, nobody should pay for energy that isn’t needed.
The company producing more than is needed needs to find either a way to store the excess, or to dump the excess. That’s what companies in every other sector of the market have to do.

Reply to  Richard Greene
September 7, 2022 8:54 am

Consumer of course via the gas power station guys and constraint payments

IanE
Reply to  fretslider
September 7, 2022 5:26 am

How about using some of any extra supplies on the CCC?!

HotScot
Reply to  fretslider
September 7, 2022 6:21 am

Where do we begin with this sh*t.

The government’s independent climate and infrastructure advisers

Independent? Deben runs a CC consultancy which has been paid over £500,000.

…….warning that ramping up gas production would not solve the problem.

What’s the solution then?

This would necessitate policies such as home insulation, requiring public agencies to improve the energy efficiency of their buildings, setting up an energy advice service for consumers, and increasing renewable energy generation, particularly onshore wind and solar power.

So nothing immediate to relieve the public from bills some anticipate to be £7,000 – £10,000 by next April. Right, very smart.

“But our gas reserves – offshore or from shale – are too small to impact meaningfully the prices faced by UK consumers.”

So 10% of known shale reserves providing 50 years of supply for the whole of the UK isn’t enough?

“Renewables are the cheapest form of electricity generation. Onshore wind and solar have the potential to be deployed fastest and thus reduce our reliance on natural gas sooner,” they wrote.

So where is all the cheap electricity from these sources? Ah! Right, CfD’s at £75Mwh negotiated with the government have been rejected in favour of market prices at £250Mwh. No price gouging there then.

Truss has said little so far on how she would improve home insulation

Probably because, as Michael Kelly reported some years ago, it would involve vast cost, the country doesn’t have the physical labour available to do it, the production of the insulation itself would negate any CO2 saved in heating, it would take decades and the Victorian housing stock can’t be insulated.

The Committee on Climate Change warned earlier this year that increasing the production of gas from the North Sea was unlikely to bring down gas prices and could endanger the UK’s target of reaching net zero emissions by 2050.

I guess they haven’t got the memo yet, NetZero died when Boris was caught partying during lockdown.

Deben and Armitt wrote that up to three-quarters of UK households are threatened by fuel poverty.

Meanwhile, most informed commentators were predicting no more than one third, prior to the cost being frozen. £2,500 is still double what it should be but it reduces the problem substantially.

“The best policies for the consumer are those that support lasting energy security and a low-carbon, low-cost energy system. The independent analysis of our respective organisations is that this will deliver a long-term return on investment and set the UK on a path to prosperity.”

You’ve been trotting out this same old sh*t for the last 30 years, and look where it’s got us.

Rescind the Climate Change Act and get that £500,000 back from the Charlatan Deben.

Kevin kilty
Reply to  HotScot
September 8, 2022 10:50 am

Excellent disassembling of dissembling.

Reply to  fretslider
September 7, 2022 8:53 am

I have a name for ‘Lord Deben’

Dave Andrews
Reply to  Leo Smith
September 7, 2022 9:31 am

The UK Treasury obviously has had doubts about the Climate Change Committee for some time.

Earlier this year the Commons Public Accounts Committee Report ‘Achieving Net Zero:Follow Up’ said

“HM Treasury witnesses were reluctant to be drawn on the future costs of achieving net zero cautioning that the Climate Change Committee estimates contain ‘heroic assumptions’ with errors potentially compounding over very long periods”

Roy Everett
September 7, 2022 4:23 am

I suspect she will allow fracking, especially in Lancashire. It only got vetoed by a narrow margin, in order to appease the Greens.  As a bonus we can use it to warm the hordes of EU energy refugees lining up along the shores from Hamburg to Rotterdam.

IanE
Reply to  Roy Everett
September 7, 2022 5:24 am

Maybe, but her weasel words on the topic are rather worrying!

Last edited 26 days ago by IanE
HotScot
Reply to  Roy Everett
September 7, 2022 6:26 am

It was only vetoed because the limits of its geological effects were set at a ludicrously low threshold.

It was likened to dropping a bag of shopping. Perhaps slightly exaggerated but industry and transport produce far more seismological effects than fracking is anticipated to do.

The report from the Geological Society is expected soon, if it’s not already known, and it should produce an honest assessment, we hope.

Reply to  HotScot
September 7, 2022 9:00 am

I used to live in a London flat where you got more earth tremors from the buses outside the window than fracking has ever produced.
A mates basement flat was bang over the Picadilly line.
When I worked in Joburg, earth tremor were a daily occurrence from blasting in the gold mines.
Wind farms produce continuous earth tremors.
who benefits from a ban on fracking?
Cui Bono?
Follow the money
Go figure.,

Tom in Florida
September 7, 2022 4:28 am

When speaking of government subsidies, do not forget that the government money comes from the people unless the Royals donate to the cause.  E tu Prince Charles?

Richard Page
Reply to  Tom in Florida
September 7, 2022 4:13 pm

The UK government gets a huge cash influx from the Crown Estate incomes every year; so yes, the Royals do contribute quite a lot to the government.

Michael in Dublin
September 7, 2022 4:28 am

Governments hide tax by not having a simple system of Value Added Tax or Sales Tax that is clearly indicated on the till slip or receipt. Fifteen years ago we were paying less than €1 per liter of fuel in Ireland. The government got a chunk of this. This more than doubled but has recently come down. According to the AA (Aug 2022), the price before taxes was 87.1c but pump price 186.9c i.e. 53.35% tax.

When prices double or treble the total amount governments collect massively increase. It is a gimmick when a government gives a temporary VAT reduction on electricity and gas as has happened here because the government is getting far more tax out of the hard pressed average taxpayer. This is not a problem for the wealthy and politicians on double the average public sector salaries. Their fuel, gas and electricity costs are a much smaller percentage of their total expenditure.

Let’s see how Truss threads this needle.

Reply to  Michael in Dublin
September 7, 2022 6:27 am

I predict Truss goes bust

HotScot
Reply to  Richard Greene
September 7, 2022 7:10 am

With your level of knowledge on the subject, you would.

fretslider
Reply to  Richard Greene
September 7, 2022 9:09 am

And what of the taxpayers?

HotScot
Reply to  Michael in Dublin
September 7, 2022 6:27 am

She has pledged to reduce taxes.

Simonsays
September 7, 2022 4:46 am

Gas companies get to go subsidy mining.
It won’t end well for the taxpayer.

HotScot
Reply to  Simonsays
September 7, 2022 7:11 am

The government is paying the bill. It’s not a subsidy which come with legal commitments.

jeffery p
Reply to  HotScot
September 7, 2022 10:03 am

Huh?

HotScot
Reply to  jeffery p
September 7, 2022 2:43 pm

It’s straightforward. The government is proposing to pay the country’s gas and electricity bills. A subsidy is an entirely different thing.

Subsidies are something wind farms get or EV manufacturers are paid in addition to what the consumer pays. They are long term arrangements and come with complicated legal implications.

Subsidies also take time to compile, something the UK doesn’t have. There have been calls for the 25% renewables subsidies apportioned to energy bills in the country to be scrapped. The problem is they are also legal government obligations and come with legal commitments.

Far simpler and quicker is to have the government simply pay energy suppliers for the amount above what the consumers energy bills are frozen at. Quick in, quick out.

Simonsays
Reply to  HotScot
September 7, 2022 3:37 pm

Maybe you should have read the article first.

“Under the plans being worked on by the Treasury, the UK government would subsidise the wholesale cost of gas”

observa
September 7, 2022 4:47 am

The real problem is with gas setting the reliable dispatch price the unreliable dumpers reap windfall and solarfall profits. The solution is to redress that by demanding all tenderers of electrons to the communal grid must reasonably guarantee them along with frequency and voltage control. That way the unreliables have to partner with dispatchables to up their average tender. Naturally they’ll have to pay the reliable gas insurers for that privilege thereby lowering their tender pricing.

That sets the level playing field framework now and for the future. Bearing in mind total world energy demand and this short term price spike will come back into balance once Putin manages to redirect Russian energy to the likes of China and India.

observa
September 7, 2022 5:32 am

Or to put it another way never waste a good crisis to fix what should have been the anti-dumping framework for the fickle shucksters right from the very start. Yes the fossil fuel dispatchables will largely be calling the shots with all the dumpers and if they don’t like it they can stick in their own batteries or pumped hydro or whatever. Let’s have a level playing field on behalf of power consumers right now rather than reaching for the taxpayer trough and all its attendant distortions.

HotScot
Reply to  observa
September 7, 2022 7:30 am

With domestic gas bills anticipated to reach £7,000 – £10,000 by next April (from about £1,000 last February) impoverishing more than half the country, you expect a level playing field right now to be a solution?

Businesses don’t benefit from the price caps domestic users do and costs have already reached ten times the level they were at.

Within months the UK will have no businesses left. No one can afford that and if they could, consumers struggling with fuel poverty couldn’t afford to pay the price producers would have to charge for goods.

Farms would just shut down because they couldn’t afford to grow food or buy food for animals. And if they could, processors couldn’t afford to operate factories and supermarkets couldn’t afford to open to sell the food.

We are facing a depression that would make 1930’s America look like a cakewalk. It wouldn’t be bankers jumping out of windows, it would be small business owners.

There is a short term problem with an imminent solution in getting fracking and North Sea gas flowing.

Covid wasn’t a crisis, this is.

Reply to  HotScot
September 7, 2022 9:04 am

I don’t believe they will go that high, but for sure we will be seeing a sharp recession, in Europe, with the UK probably doing better.

Already diesel and petrol prices are sinking slowly back.

But it will be extremely tough on the lower paid without savings.

HotScot
Reply to  Leo Smith
September 7, 2022 2:47 pm

Great, some of the greatest economic minds in the country assess the possible outcomes but you “don’t believe” them.

It’s accepted as almost certain that the next price cap will be set at over £5,000. That’s barely in dispute. The following one is likely to be considerably higher.

Buckeyebob
September 7, 2022 5:42 am

President Nixon tried wage and price controls in the early 70’s. They did not work and neither will this

HotScot
Reply to  Buckeyebob
September 7, 2022 7:12 am

It’s not a price control. Please keep up.

John Endicott
Reply to  HotScot
September 8, 2022 7:50 am

 “capping the cost of gas” is a textbook example of price controls. Please keep up.

Lark
Reply to  Buckeyebob
September 7, 2022 9:11 pm

And they were overwhelmingly popular …until even the idiots figured out that suppliers would sell nothing at all if it was that or sell at a loss.
In the long term I agree with you, but I think this is just a short-term way to reduce the pain that will be caused by the Green disaster during the coming winter.

Also, apparently someone thinks “capping the cost of gas” isn’t a price control. Who knew?

John Endicott
Reply to  Buckeyebob
September 8, 2022 7:52 am

Indeed Buckeyebob, wage and price controls eventually fail because they don’t work over the long term. As a short term band-aid to help those lower down the economic scale to keep warm this winter, it might work, but only if there’s a good plan to fix the underlying problem that is being band-aided

September 7, 2022 5:46 am

The Truss honeymoon period never started!

According to a poll taken by YouGov, only 12 percent of UK respondents think she will make a “good” or a “great” prime minister. Where 55 percent of respondents said they thought Johnson was a “poor” or “terrible” PM, Truss has fared little better with 52 percent holding the view. Looking back beyond Johnson, a majority of Britons said Truss would be worse than every past leader going back to Thatcher. This includes 34 percent of respondents saying she would be worse than Theresa May.
The survey also found that while on the whole people have not made their mind up about the incoming PM, 38 percent of people agreed that she was “hardworking” and 65 percent of people said she was “out of touch with ordinary people.”

SOURCE:
Only 12% Of Brits Have Trust In Truss | ZeroHedge

observa
Reply to  Richard Greene
September 7, 2022 6:19 am

Fine then if she wants to turn that around she needs to fix the electricity problem first and foremost and that involves sorting out the dumping problem as I outlined. Printing money will just beget more inflation or borrowing lead to more taxes or some combination of the two and that’s political death anyway. OTOH let the dumpers pay to bring down the dispatchables price setting costs.

HotScot
Reply to  Richard Greene
September 7, 2022 7:13 am

Trump was going to start WW3.

MarkW
Reply to  HotScot
September 7, 2022 8:33 am

He did, however it was between conservatives and socialists.

MarkW
Reply to  MarkW
September 7, 2022 11:40 am

The socialists are still fighting it.

Simon
Reply to  MarkW
September 7, 2022 1:11 pm

Huh? It’s not the dems who are moaning the election was stolen.

HotScot
Reply to  Simon
September 7, 2022 2:50 pm

The Dems have moaned that every election they lost has been stolen. Hilary even went to the extent of concocting the Russia collusion about it.

WTF are you smoking? I know you socialists struggle to tell the truth but FFS, all this is documented.

Reply to  Richard Greene
September 7, 2022 9:07 am

Well as of today I am beginning to think she is probably the best of a bad lot. Lol!
It is not hard to work out what needs to be done, but it is very hard to persuade people of that.
OPs today are meaningless. What counts is the next two years.

Shoki Kaneda
September 7, 2022 6:05 am

Because price controls have such a fine historical success record?

HotScot
Reply to  Shoki Kaneda
September 7, 2022 7:13 am

They are not price controls. The government is paying the bills, that’s it.

Try to keep up.

September 7, 2022 7:09 am

Lol

When are the politicians going to learn its a global market, anything they do just distorts the market and gets driven into the market cost globally. All they are doing is sending money directly to the producers, it will have zero benefit for the consumer and the cost to keep wholesale prices flat will skyrocket. They need to stop trying to manipulate the market and start increasing supply that is the only solution that actually works.

HotScot
Reply to  bob boder
September 7, 2022 7:18 am

That depends on the deals done with, for example, domestic frackers.

They perhaps get their arm twisted to deliver gas at extraction cost’s plus a reasonable profit until an agreed level of international price is reached, or they don’t get to frack at all.

Unethical perhaps but it’s short term. 10% of Lancashire’s available gas represents 50 years of UK supply. Plenty of time to recover profit on the international market.

2hotel9
September 7, 2022 7:15 am

This will fail, miserably, as all leftist “solutions” do and are meant to. Without massive upping energy production it is only going to get worse, and banning fertilizer is going to collapse food production, especially in northern regions. Bunch of idiots.

observa
September 7, 2022 7:18 am

Wakey wakey Liz.

Now putting aside the daytime solar duck curve problem and what they’d pay. What would wind farms in Oz have to pay coal gas and hydro dispatchable generators in order to achieve their annual average output of a third of installed capacity when their monthly output looks like this and worse?
Wind Energy in Australia | August 2022 | Aneroid

Well they’d either pay the dispatchables their just insurance/smoothing dues or else they keep their fickle electrons and use them themselves for desalination making hydrogen green steel or whatever takes their fancy. Just they don’t get to keep bludging off what power consumers really require thereby jacking up overall power costs. There’s a veritable hidden stack of green folding stuff there for the subsidizing Liz.

Olen
September 7, 2022 7:42 am

Maybe they should look at what caused the problem instead of making the problem work.

Pat from Kerbob
Reply to  Olen
September 7, 2022 10:17 am

That is all they have, applying a bandaid to the problem they created, then another bandaid for the problem this “solution” created, rinse repeat.

Government job creation.

John the Econ
September 7, 2022 8:00 am

If only there was a field of study dedicated to predicting how this would work out.

DiggerUK
Reply to  John the Econ
September 7, 2022 11:06 am

Try your local Computer Modelling Club…_

David Anderson
September 7, 2022 8:02 am

This woman is no Margarette Thatcher

HotScot
Reply to  David Anderson
September 7, 2022 2:53 pm

She’s not Margaret Thatcher either, but she’s never claimed to be. The media have made all this crap up to begin the process of discrediting her before she’s begun her job.

Surely you understand how the leftist media works by now?

David Anderson
September 7, 2022 8:11 am

Prices = information. They are introducing noise into the market. This will lead to bad decision making up and down the energy market.

MarkW
September 7, 2022 8:19 am

A conservative who goes straight for the socialist playbook.
Only in Europe.

M Courtney
September 7, 2022 8:19 am

The policy is being announced tomorrow.  This was just a fig leaf to enable Truss to say “I’ll tell you tomorrow” at PMQs.
All we know is that this will cost a fortune and it is being financed by increased public borrowing.
We need to wait until tomorrow to make a reasoned judgement.  Thee are no details yet.

JamesD
September 7, 2022 8:55 am

Price caps, subsidies, and printing money won’t provide one additional SCF of gas. They need to drill and exploit their shale gas. And build some beautiful clean coal plants.

Wait until this winter when they get a cold high pressure system with minimal wind. It’s going to be ugly.

griff
September 7, 2022 9:12 am

windfall profits being made by renewable energy firms’… UK renewables are obliged to return income which is over the strike price for their asset. Given the wholesale price is over that of many recent strike prices, UK renewables are returning that cash right now.

Ben Vorlich
Reply to  griff
September 7, 2022 10:22 am

Griff
Wrong, wrong, wrong
Wind and Solar suppliers are currently making £43 billion windfall profits. They are doing this by selling at the strike price. This is currently set by the cost of gas.
Not bad for supplying 7% of the total energy for the UK.
Supplying at over the strike price is one of your red herrings

michel
Reply to  Ben Vorlich
September 7, 2022 12:08 pm

Yes. Griff, one fears, either doesn’t know how renewable pricing works in the UK, or is being deliberately deceptive.

Yes, if they supply over the strike price they return it. But if the strike price is so high that they make profits which, were they oil or gas or coal companies, would be called ‘obscene’, they just pocket them.

There is also the recent loophole that they have been refusing to supply at contractual prices but instead have been selling at open market prices which are set by… the price of gas. The profits from this will not be returned.

HotScot
Reply to  michel
September 7, 2022 2:54 pm

He’s a f’kn eejit.

Dave Andrews
Reply to  griff
September 8, 2022 7:00 am

griff under the Contracts for Difference scheme wind farms can delay by up to 3 years taking up the CfD. Since the price of energy rose in autumn 2021 nobody has taken up a CfD. They are all selling at the market price and making bumper profits. CfD like so many Government schemes is very flawed.

Robert of Ottawa
September 7, 2022 9:16 am

Haha Putting a price limit on something that doesn’t exist; a subsidy to purchase something that isn’t there. Isn’t the problem the absence of energy, not its price?

Pat from Kerbob
Reply to  Robert of Ottawa
September 7, 2022 9:30 am

The problem is absence of intelligent thought and policy.
Government cap means the treasury bleeds dry but because no one sees the real cost, real change is avoided.

Its all backward and stupid, so much so its a wonder Trudeau isn’t behind it.
I mean, we lead the world in stupid.
Canada is back.

TEWS_Pilot
Reply to  Robert of Ottawa
September 7, 2022 10:19 am

You are a meany….. /sarc>

How Dare You Greta Thunberg gif.gif
Pat from Kerbob
September 7, 2022 9:28 am

This will work until British govt finances collapse, as they inevitably will.

jeffery p
September 7, 2022 9:50 am

So much for Liz Truss and the spirit of Margaret Thatcher.

Chris Nisbet
September 7, 2022 9:51 am

What did Liz Truss mean when she said “kicking the can down the road will not do” (https://www.rnz.co.nz/news/world/474124/truss-promises-immediate-action-on-energy-if-appointed-uk-pm)

Richard Page
Reply to  Chris Nisbet
September 7, 2022 4:25 pm

The previous govt policy was to provide the UK citizens with financial help whilst keeping their fingers crossed that it would all end soon and things get back to normal. This was ‘kicking the can down the road’ and not dealing with the underlying causes of the problem. One rather hopes that Truss and her team will try to sort out the underlying cause and get something done sooner rather than later.

Michael in Dublin
September 7, 2022 9:53 am

Why, when prices have gone through the roof, is green unicorn energy not coming to the rescue? They certainly do not need any subsidies with these high prices either so should be opening the floodgates.

Reply to  Michael in Dublin
September 7, 2022 2:12 pm

Yes, that is a very good question. One which every sane person in the UK ought to be asking. But I don’t know how sane Truss is.

TEWS_Pilot
September 7, 2022 10:15 am

Get in the “Wayback Machine” and look at how Price Controls have worked in the past.

History 101: Price controls don’t work – Chicago Tribune
Inflation — just above 4 percent in 1971 — was in double digits when the controls were lifted.

[SNIP]

The history lesson for this Congress (or any other government body) could not be clearer. Price controls could create shortages and leave our economy dangerously exposed to disruptions in supply. In the 1970s, we were the only nation on Earth to have gas lines. Why would anyone ever want to go back to that?

https://www.chicagotribune.com/news/ct-xpm-2007-06-07-0706061080-story.html

HotScot
Reply to  TEWS_Pilot
September 7, 2022 2:57 pm

For the umpteenth time, this is not a price control!

The government is not telling energy companies what they can sell their products for, they are simply topping up consumer payments.

Richard Page
Reply to  HotScot
September 7, 2022 4:29 pm

I understand it, you understand it but there does appear to be an element on the site that simply doesn’t understand or comprehend what they just read. It must be an adult (il)literacy problem!

michel
September 7, 2022 11:17 am

“In the long term, Truss’s new government wants to decouple electricity prices from gas entirely, a policy the EU is also pursuing.”

Its a most noble ambition, but the only way to achieve it is to stop trying to move to wind and solar power generation, since they require backup, and the only backup that works fast enough and on the right scale is gas.

So the more wind and solar you install, the more you couple your electricity prices tightly to the price of gas.

And yet there are still large numbers of people in media and government who think the solution to the gas price and supply problem is to install more wind and solar! They really think (or have been sold) that its a measure which will decouple gas and electricity prices.

Dave Andrews
Reply to  michel
September 8, 2022 6:23 am

Moreover the unreliable wind industry is bigger than ever and its costs are no longer falling. Earlier this year Wind Europe said Europe’s 5 major turbine manufacturers were operating at a loss. And as more wind goes offshore those costs are only going to go in one direction and it is not down.

Dusty
September 7, 2022 11:32 am

Capping the cost of gas and bring down prices.

ROTFL. Decouple … LMAO.

They live a Bizzaro world. The problem is that we let them and probably will continue to do so right up to societal collapse.

HotScot
Reply to  Dusty
September 7, 2022 3:02 pm

If you had anything to do with it, the country would fall.

The retail price of energy is being frozen at the consumer end. The difference between the frozen price and the wholesale bill is being paid by the government.

Like your rich uncle bunging you a few quid every month for the six months you find yourself unemployed and your benefits don’t quite pay the mortgage.

Please try to understand what are, to most of us, fairly straightforward concepts.

Ross
September 7, 2022 11:39 am

Smacking the “invisible hand” while it is in the cookie jar are we? Poor start. It will be a
bit chilly, but, hey….you will be paying less for fuel you can’t buy….or something like that.

Richard Page
Reply to  Ross
September 7, 2022 4:36 pm

Did we read the same article? If we did then one of us has a comprehension problem and it isn’t me. The UK will buy fuel at market prices, got that? Ok so far, are we? The government will cap the cost to the consumer and pay the difference to the energy provider. Did you get that? Are you still as fricken’ confused as you seemed to be from your post? To recap, they’re not trying to impose a price cap on fuels, just on the cost to the consumer.

Gordon A. Dressler
September 7, 2022 11:47 am

Coming next:  LIz Truss to nationalize UK fossil fuel industries

HotScot
Reply to  Gordon A. Dressler
September 7, 2022 3:03 pm

Don’t be an idiot all your life.

Gordon A. Dressler
Reply to  HotScot
September 7, 2022 6:54 pm

Really?  How does it feel?

John Endicott
Reply to  HotScot
September 8, 2022 8:03 am

Thanks for being a model of what being an idiot all ones life looks like, so he knows what to avoid. 😉

Richard Page
Reply to  Gordon A. Dressler
September 7, 2022 4:41 pm

Wot a maroon! Everyone (except Jeremy Corbyn and his fellow travellers) know that you only need to nationalise one of them to put enough of a thumb on the scales – nationalise one energy provider and market forces should do the rest for the consumer. Marxism is such a ridiculously blunt tool, don’t you feel? No subtlety at all.

Gordon A. Dressler
Reply to  Richard Page
September 7, 2022 6:58 pm

definition of maroon:  adjective – of a brownish-crimson color

Now, you were saying something about subtlety . . .

John Endicott
Reply to  Gordon A. Dressler
September 8, 2022 8:07 am

guess you never watched much Bugs Bunny in your youth.

What a Maroon – Meaning, Origin and Usage – English-Grammar-Lessons.com

The expression “what a maroon” means “what a moron.” 

The origin of the expression “what a maroon!” comes from the legendary Warner Bros. cartoon series, “Looney Tunes.”

Bugs coined the expression “what a maroon” in one of the early episodes of the cartoon.

Gordon A. Dressler
Reply to  John Endicott
September 8, 2022 11:16 am

John,

I did watch Bugs Bunny TV cartoons in my earlier years.

But then I grew up, and never looked back to those cartoons as a source of inspiration in my writings.

🙂

Last edited 25 days ago by Gordon A. Dressler
John Endicott
Reply to  Gordon A. Dressler
September 9, 2022 7:20 am

So you only pretended to not know what the expression being used meant in order to be snide. That makes you look even worse than had you admitted to not knowing what the expression meant.

Gordon A. Dressler
Reply to  John Endicott
September 9, 2022 7:38 am

You are mistaken.

I admit to having watched Bugs Bunny cartoons long ago.

I truthfully posted (implied) that I have no memory whatsoever of the particular phrase “what a maroon”, either associated with that show or coming from elsewhere.

I make no apologies for that fact.

AndyHce
September 7, 2022 12:06 pm

So, everyone in the country gets a new credit card upon which they will buy their way into long term poverty.

Richard Page
Reply to  AndyHce
September 7, 2022 4:44 pm

It may just come to that if the gamble doesn’t pay off. Of course if the public really hates her and Labour win the next election it’ll get even worse and much, much faster.

KcTaz
September 7, 2022 12:58 pm

“Capping gas prices would lower wholesale electricity rates. About 40 per cent of Britain’s electricity is generated by gas-fired power plants, which tend to set wholesale rates for the rest of the market, even though other technologies such as wind produce power more cheaply.”
I doubt wind produces energy more cheaply if you include all the costs involved in getting the windmills manufactured in China and put in the ground in the UK and amortize those costs over their 10 to 20-year lifespan. Also, if you count the costs of backing them up 24/7 with fossil fuels to maintain the grid.

Dave Andrews
Reply to  KcTaz
September 8, 2022 6:05 am

Unreliables also push up the price of the gas used to back them up because the gas power plants don’t know in advance when they will be required to back them up and thus cannot get stable long term contracts for the gas they use.

ResourceGuy
September 7, 2022 2:43 pm

Ah, more gas for the Germans.

Bob
September 7, 2022 4:22 pm

“About 40 per cent of Britain’s electricity is generated by gas-fired power plants, which tend to set wholesale rates for the rest of the market, even though other technologies such as wind produce power more cheaply.”

In what world does wind produce energy more cheaply than gas?

Price caps are not the preferred choice in the long term, however if she starts up all coal plants, nuclear plants and gas plants as well as mine lots of coal, drill lots of gas and builds more gas and nuclear plants, I am with her with the caveat that the caps require a built in limit.

observa
Reply to  Matt Kiro
September 8, 2022 2:58 am

Plenty of advice-
With no new windfall tax on energy firms, a cap on nuclear and renewables is urgently needed (msn.com)
But we’ll see if she gets the overarching dumping problem and sorting out a level playing field once and for all.

Quilter52
September 7, 2022 6:59 pm

Dear Liz, risk some longer term strikes and reopen some of those UK coal mines. Remove ALL subsidies from green energy and allow fracking. Get some plans on the table for building some new nuclear reactors.

James F. Evans
September 7, 2022 8:51 pm

Some people are talking about Third World status for Britain.

I shake my head…. all that green stuff.

And they want to do it to America.

JBP
September 8, 2022 6:05 am

Instead of fixing a real problem let’s……

Neo
September 8, 2022 9:35 am

I thought Nixon proved that wage and price controls don’t work

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