I think you're largely spot on with this, but I don't think you should be relying on Hannah Richie to explain the cost of our electricity bills! I've just read her post, and there's a glaring omission.
Hannah is claiming that the overall cost of our bill is driven by wholesale gas prices even when barely any gas is used, and that the price of wholesale gas is higher than the price of renewables. If this is true, then where is the money going??? We are still paying our very high bills, yet according to the Ofgem graph shown in Hannah's post, operator profits have barely increased at all. If we were being charged bigger bills because the price of gas had gone up and we were using more gas, then that would make sense, but if the price has gone up because the theoretical price of gas we AREN'T using has gone up but we're actually still getting the lion's share of our power from cheaper sources, those profits should have ballooned!
I really think you need to debunk (or at least get to the bottom of) that explanation before this Reform debunk can be considered valid.
It goes off marginal pricing so the imperative is energy security, this means gas sets the price of low cost renewables. It augments profits, hence the implementation of a windfall tax of 45%. One explanation might be that this could be circumvented by ploughing costs back into investment which would mean it is not longer subject to the windfall tax
the government is effectively acting as a guarantor for private investment, this is what Great British Energy does. It needs the private sector to want to spend but the way the levy works means a lot cannot break even - for example in wind they are having a torrid time getting people to invest. You are protected under Contract for difference because government guarantees a strike price but otherwise revenues will fall. To make up the state would have to increase it's spending up to 100bn (spending approx 8bn now) just in this parliament. The new plan is to exempt firms is to cost about 20m by end of parliament but is considered small if firms actually invest. My guess would be the same with housing, you might have grand plans but who knows how the private sector will act. Flip the coin and have the state running it then borrowing will skyrocket - a shame because this is the only viable way.
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Have you forwarded a copy to
Nigel Farage and GBNews ?
👋
I think you're largely spot on with this, but I don't think you should be relying on Hannah Richie to explain the cost of our electricity bills! I've just read her post, and there's a glaring omission.
Hannah is claiming that the overall cost of our bill is driven by wholesale gas prices even when barely any gas is used, and that the price of wholesale gas is higher than the price of renewables. If this is true, then where is the money going??? We are still paying our very high bills, yet according to the Ofgem graph shown in Hannah's post, operator profits have barely increased at all. If we were being charged bigger bills because the price of gas had gone up and we were using more gas, then that would make sense, but if the price has gone up because the theoretical price of gas we AREN'T using has gone up but we're actually still getting the lion's share of our power from cheaper sources, those profits should have ballooned!
I really think you need to debunk (or at least get to the bottom of) that explanation before this Reform debunk can be considered valid.
It goes off marginal pricing so the imperative is energy security, this means gas sets the price of low cost renewables. It augments profits, hence the implementation of a windfall tax of 45%. One explanation might be that this could be circumvented by ploughing costs back into investment which would mean it is not longer subject to the windfall tax
I could see how that makes sense if the energy companies are indeed ploughing it back into investments. Do we know if they are?
the government is effectively acting as a guarantor for private investment, this is what Great British Energy does. It needs the private sector to want to spend but the way the levy works means a lot cannot break even - for example in wind they are having a torrid time getting people to invest. You are protected under Contract for difference because government guarantees a strike price but otherwise revenues will fall. To make up the state would have to increase it's spending up to 100bn (spending approx 8bn now) just in this parliament. The new plan is to exempt firms is to cost about 20m by end of parliament but is considered small if firms actually invest. My guess would be the same with housing, you might have grand plans but who knows how the private sector will act. Flip the coin and have the state running it then borrowing will skyrocket - a shame because this is the only viable way.