𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Ofgem is set to announce the energy price cap for millions of households with prices set to rise by 2% this year – meaning yet another winter of high energy bills. The increase is slightly more than analysts expected, meaning a family using a typical amount of energy will pay £1,755 a year – up £35 on the current cap. This country’s energy saga speaks to the very core of broken Britain. That for decades we have not come to grips with this issue, and our elderly now find themselves choosing between eating and heating, is to our everlasting shame.

What makes this latest rise even more infuriating is that it comes as wholesale energy prices are actually falling. The rise in electricity prices is net-zero related. Grid ‘balancing costs’ are spiralling as the system struggles to deal with the moments when there is either too little or too much electricity being generated – a problem that becomes worse the more we rely on renewables. 

I rarely speak so bluntly, but certain truths are self-evident: for decades, our energy policy (in so far as we can even call it ‘policy’) has been set by complete incompetents. And Ed Miliband is chief amongst them.

For 20 years, Britain’s energy policy has been a masterclass in incoherence. We started with the Renewables Obligation in 2002, then binned it for Contracts for Difference a decade later, all while lobbing endless “white papers” and “net zero roadmaps” into the void. 

Each government has tinkered with subsidies, scrapped schemes and announced shiny new targets that evaporate as quickly as the ministers who made them. Or worse still, targets that are completely adrift from reality. 

As a result, investors are left second-guessing the rules, and households are stuck footing the bill. The political class congratulates itself for “forward planning” while careening from one crisis to the next. This isn’t strategy, it’s chaos personified, and the only consistent thing is the price tag.  

Take Miliband’s favourite claim: that investing in renewables would secure supply by loosening our dependence on foreign gas. Except most of our gas now comes from Norway, as stable a supplier as you could ask for. And as for wind power being “cheap,” it only looks that way if you ignore most of the actual costs. 

The turbines don’t build themselves. The cables to bring the power ashore aren’t free. Nor are the transformers, the endless grid upgrades, or the gas stations that have to be kept running just in case the wind drops – or rises so sharply turbines must be shut down. Add all of that together, and wind isn’t cheap. It’s eye-wateringly expensive.

And according to Ofgem, today’s hike is largely “driven by an increase in electricity balancing costs” –  the extra expense of paying wind farms in remote areas to turn themselves off because the network cannot take their power where it is required.

It is no surprise Britain now boasts some of the highest energy bills in the world. Take countries like the US, Canada, France, and Germany, where businesses enjoy much lower rates than we do here in the UK.

You won’t be shocked to learn that these countries lean less on subsidised renewables or at least manage their systems with far greater efficiency. It’s why their heavy industries, unlike ours, haven’t ground to a screeching halt.

Output from our energy-intensive industries has collapsed since 2021. Paper production is down 29%. Petrochemicals down 31%. Basic metals have nearly halved. Britain is now a service economy that can barely make anything physical at all – and energy is the reason why. Meanwhile, the bill for subsidies keeps climbing.

Renewable subsidies alone amount to £25.8billion a year – about 40% of the entire cost of electricity supply, and nearly half our defence budget. To what end exactly? What tangible benefit has this delivered to ordinary people?

The incensed among us might call our politicians crooks. But whether you brand them corrupt or merely incompetent hardly matters. The truth is they act with impunity, shielded by a toothless system in which bad policy carries no real consequence. And nowhere has that failure been more ruinous than in energy.

The official line from Labour is that bills track gas prices, since gas sets the marginal price of generation. And minister Nick Thomas-Symonds continues to promise this Government can shave £300 off by 2030. Quite frankly, they have a better chance of shaking hands with Bigfoot.

Even our sovereignty is being chipped away. In a bid to ease short-term pressures, ministers are preparing to align Britain’s energy market with Brussels – effectively re-entering the EU’s single electricity market, syncing up our carbon pricing, and subjecting ourselves once again to European courts.

The government insists this will smooth trade and avoid tariffs, but the trade-off is obvious: we give up strategic control and bake in higher costs for the illusion of stability. And no matter what happens, as usual, you and I will be left picking up the bill.