From October, the cheapest electricity available in the UK will be 50p per KWh, a price dictated by Ofgem’s energy price cap. This is simply unaffordable for many millions of UK consumers, who will also be expected to pay around £30 a month standing charge if they’re supplied gas and electricity (£15 per meter). But, for small businesses, the situation is even worse. Many UK small businesses are reporting increases in fixed rates of 400% and more. A typical quote for a fixed business rate is 60p per KWh plus £3 a day standing charge. This means many thousands of small businesses will throw the towel in shortly. Perfectly good businesses that have traded for years will close due to unaffordable energy costs. Rishi Sunak has done nothing for small businesses in this situation. Nothing.
So, saying that the UK Energy Policy is broken, is, I think, fair comment, and, it is time to take action before the UK economy melts down into a recession, the likes of which, has not been seen before. What can be done? The problem is the wholesale price of electricity in the UK market. Energy suppliers bid to obtain electricity sufficient for demand. The UK Government nationalised Bulb, a UK supplier that went bust along with 29 other UK suppliers in 2021. Bulb was too big to allocate its consumers to other companies, so, the UK Government took over the business. And that is a model that could be replicated in order to nationalise energy supply in the UK. If the Government monopolised energy supply, it would be the only bidder for wholesale energy and the price would be driven down. If energy generators refused to play ball, then they too would have to be nationalised under emergency powers connected with energy security. Is there appetite for such an approach by the current Conservative Government? I doubt it, and it’s a pity that the Labour Party appear to have renounced nationalisation just recently. Can unit prices keep rising, say to £1 per KWh (or more)? Are Governments going to sit idly by and watch this happen? Do they think people will simply do without electricity and be happy?
If the Government won’t nationalise energy supply, there is another solution that would take pressure off the National Grid and, possibly, make net zero targets realistic, and that is, the roll out of solar panels on every rooftop in the UK. Together with domestic wind turbines and leisure storage batteries, this solution would bypass the energy suppliers taking millions of homes, to a large extent, “off grid”. The cost would be huge of course, but the main objection to such a plan would be from the energy suppliers, how would they make profits in such a scenario? Would such a plan even be feasible? The energy consumption of the average UK consumer is quite small when compared with the USA and Canada. The average UK consumer uses around 300 KWh per month, while in Canada it’s around 1200 KWh. So, domestic solar and wind turbines would definitely be workable if the electricity was stored in battery packs. A major problem though for UK energy consumer, is that, in Winter, gas consumption skyrockets (five or six months of the year). The UK Government classes wood burning as “renewable” in the case of the Drax power station n North Yorkshire, but, this is controversial and is being scrutinised as I type. Germany, however is encouraging its citizens to burn wood to keep warm this winter due to gas shortages, so, woodburning may have to be considered if gas is too expensive, or in short supply.
In conclusion, the UK Government has a choice. It can nationalise energy supply or even nationalise the whole energy sector in UK, or, it can de-centralise energy provision by heavily subsidising wind, solar, woodburning and battery storage, effectively taking millions of households “off grid”. These are drastic measures, but, the UK Government cannot sit idly by and watch the unit price of energy become unaffordable for millions of consumers, and, more importantly small businesses who, as a sector, employ over 60% of the UK workforce. Something has to be done, and fast.
NOTE: I doubt any of what I have written will actually come to pass, and therefore I suggest that, if you are not a millionaire, and want to continue using electricity and keeping warm in winter, you start to invest in solar panels, domestic wind turbines, battery storage and woodburners. Governments areound the world have waged war on fossil fuels and the result is lack of supply, and the law of supply and demand says high, unaffordable, energy prices are here to stay. You need to look after yourself, but, please try to help those who cannot help themselves. Good luck.