The solution to the energy crisis may be to link tariffs to useage (low use = low unit prices)

When I saw that a KWh of electricity will probably cost £1 from April 2023, I was very frightened, because, really, that’s game over for the UK economy. The forecast I saw was made by Cornwall Insight who have been bang on with their predictions so far. It’s not scaremongering, it’s reality. So, it’s pretty obvious that something needs to be done and quickly too. Many ideas have been mooted, such as “freezing” energy prices, but this “solution” creates a deficit between the wholesale price and the retail price, and that creates a huge debt for the taxpayer. How much debt? We simply don’t know, because if energy prices stay high for two years then we’re looking at maybe a hundred billion pounds, but what if prices stay high for five years or ten years? Even France who capped the retail energy price rise at 4% are now thinking again and allowing retial prices to rise. The dangers of uncapped debt are simply too great as we found during the pandemic.

Of course we have to support the poorest in society, but we also have a problem with middle income families too, not to mention businesses whose energy prices are not subject to a cap. I think the best idea I’ve heard so far, is to price energy according to use. That is, those who use less pay a lower unit price. As a rule of thumb, the bigger home you have, the more energy you use. Rich people may have hot tubs, swimming pools, a number of electric vehicles and they tend to live in bigger homes, or even have a number of homes dotted all over the place. If the “capped” price of electricity went to £1, then the highest tarrif could be, say, £3 to offset the discounts for those who use less. This doesn’t penalise the rich, rather it nudges them into getting solar panels, wind turbine, batteries and heatpumps. Measures which most poorer people simply can’t afford. One thing is certain though, without radical action civil unrest appears more likely by the day.

Leave a Reply

Your email address will not be published. Required fields are marked *