OFGEM

[River Don]

So we supposedly have a free energy market in this country but now the regulator is bringing in anti competitive rules.

No wonder Martin Lewis lost his rag.

https://www.theguardian.com/business/2022/may/16/energy-price-cap-ofgem-price-falls

It would be a joke but it's not funny.

[River Don]

Under the proposals, suppliers who win customers with cheaper deals would have to pay the old supplier 85% of the difference in tariffs. The regulator argues that it would protect companies from being destabilised but Lewis said it would deter competition.

This is clearly protectionist so why is a Tory government allowing it? What's the point of trying to create a free energy market if you're going to allow them to put a spanner in the works and prevent customers switching?

It seems this market idea is broken. Perhaps it is high time for re-nationalisation?

[Filo]

EDF are the National supplier in France, the French Govt have restricted their price rises, OFGEN have allowed massive increases here, UK EDF customers are subsidising French Customers

[Donnywolf]

Yeah pylon the pressure for us.

[albie]

The regulator is supposed to be a watchdog ensuring the consumer interest is protected.
This has been turned on its head to mean protecting the profits of the industry is the main objective.

Short video setting out the scam underway here;
https://twitter.com/KernowDamo/status/1526512498110865408

Wait for some non solution like windfall tax to come up as a temporary measure, to divert the discussion from the real solution of public ownership of the energy sector.

[SydneyRover]

first they have to come up with a story to show they are not taking up a labour idea!

[albie]

first they have to come up with a story to show they are not taking up a labour idea!

From memory, Margaret Thatcher was a great fan of the windfall tax, as a way of mitigating undesirable impacts from rampant privatisation.

It allows the business model to remain in place, while being seen to "do something" to ward off political pressure.

[River Don]

They could use the proceeds of a windfall tax to invest in a new insulation program for the country. Just a thought.

[BigH]

OFGEM have been asleep at the wheel.

Presided over a catastrophic failure of the retail market - what was it, nearly 30 providers?, went bust - leaving the consumer at the mercy of retail providers who were also participants in the oligopolistic wholesale market.

Didn't demand investment in gas storage to ensure that consumers had any protection against short term market volatility.

Thatcher always acknowledged that allowing a free market also required strong regulation to stop market participants taking the michael. As anyone in the US will tell you. Is OFGEM that strong regulator? Absolutely not.

Will anyone in this government initiate the essential overhaul that's required? Clue: Kwasi Kwarteng is the Minister responsible for OFGEM!

[idler]

How many millions are the government raking in in vat with this ever increasing energy price increase.
The same applies to fuel and none of it coming back to the consumer.

[BillyStubbsTears]

Here's a thought. When the Govt finally do what Starmer has been asking them to do for weeks and impose a windfall tax to pay for alleviation of energy bills, who will be called Captain Hindsight then?

[River Don]

So if they take a windfall txt on energy companies and use it to subsidise consumer energy bills... Then won't that just maintain the demand for gas and so only feed the inflation?

Where as if the windfall tax were used to subsidise insulation and perhaps add  to the UKs clean energy generation, that that would reduce the demand for gas and be disinflationary. It would remove the UKs need to import the low levels of Russian gas we do. And as a bonus lower Co2 emmisions.

[BillyStubbsTears]

RD.
There is a bare minimum demand for gas and electric already in the system. People have to eat and stay warm. Even if they cut back on usage,  some of the poorest people in society are going to be tipped into penury by the basic rates of energy costs doubling.

This is an emergency. It needs treating like an immediate emergency.

We aren't going to insulate 20 million homes in 6 months.  That is a decade-long task. We SHOULD have been doing it for the last decade but that bus has left the depot now. We do need to be massively upping the game on insulation but that has to come in addition to saving people from abject poverty NOW, not instead of it.

[River Don]

Fair point BST the urgency of the situation is clear.

But there is also an urgent need to reduce our dependency on gas. Anyway there's no sign of the Tories introducing any scheme to improve insulation levels in the country.

[drfchound]

In 2008 approximately 21% of UK homes had adequate loft insulation.
In 2020 that figure had risen to 39%. The cost to retrofit a typical family home to net zero standard is estimated at about £26,000. This is based on an analysis of work by the Climate Change Committee – a body of experts that advises the UK government. Multiply those 26 million homes by £26,000 and the overall price tag is £676 billion.

[River Don]

In 2008 approximately 21% of UK homes had adequate loft insulation.
In 2020 that figure had risen to 39%. The cost to retrofit a typical family home to net zero standard is estimated at about £26,000. This is based on an analysis of work by the Climate Change Committee – a body of experts that advises the UK government. Multiply those 26 million homes by £26,000 and the overall price tag is £676 billion.

We will never reach that level of net zero homes. There are far too many older properties where it will never be practical.

That doesn't mean there isn't plenty of scope to improve matters a great deal though. Only 39% of UK homes with adequate loft insulation is a striking stat.

[BillyStubbsTears]

Interesting numbers there from Hound. They really make the point.

The Labour Govt made a big move towards encouraging insulation from 2007. That was hard wired in for the first few months of the Tory Govt. Between 2008 and 2012, the numbers if houses with adequate loft insulation rose from 21% to 34%. Then, under Austerity, the Tories cut the funding. Over the next 8 years, the rate of increase collapsed, so that it only hit 39% by 2020..
This is a regular con by the Tories. Choose the start date so they get credit for policies they opposed and then cut. It's obviously working on Hound.

If we'd carried on at the 2008-12 rate, there'd now be 85% of homes with adequate loft insulation. Yes it would have cost a lot. But it would also have put people to work during the worst decade of economic growth in 200 years. And we'd be in a far better position now, with the majority of homes using less energy on heating day in, day out.

[drfchound]

RD, that 39% figure is up to 2020.
I don’t have a more up to date figure just yet.

[drfchound]

Interesting numbers there from Hound. They really make the point.

The Labour Govt made a big move towards encouraging insulation from 2007. That was hard wired in for the first few months of the Tory Govt. Between 2008 and 2012, the numbers if houses with adequate loft insulation rose from 21% to 34%. Then, under Austerity, the Tories cut the funding. Over the next 8 years, the rate of increase collapsed, so that it only hit 39% by 2020..
This is a regular con by the Tories. Choose the start date so they get credit for policies they opposed and then cut. It's obviously working on Hound.

If we'd carried on at the 2008-12 rate, there'd now be 85% of homes with adequate loft insulation. Yes it would have cost a lot. But it would also have put people to work during the worst decade of economic growth in 200 years. And we'd be in a far better position now, with the majority of homes using less energy on heating day in, day out.

Another cheap shot at me in that post by bst who has the nerve to call other posters out for doing the same thing.  Hypocrite.

[drfchound]

Interesting numbers there from Hound. They really make the point.

The Labour Govt made a big move towards encouraging insulation from 2007. That was hard wired in for the first few months of the Tory Govt. Between 2008 and 2012, the numbers if houses with adequate loft insulation rose from 21% to 34%. Then, under Austerity, the Tories cut the funding. Over the next 8 years, the rate of increase collapsed, so that it only hit 39% by 2020..
This is a regular con by the Tories. Choose the start date so they get credit for policies they opposed and then cut. It's obviously working on Hound.

If we'd carried on at the 2008-12 rate, there'd now be 85% of homes with adequate loft insulation. Yes it would have cost a lot. But it would also have put people to work during the worst decade of economic growth in 200 years. And we'd be in a far better position now, with the majority of homes using less energy on heating day in, day out.

Another cheap shot at me in that post by bst who has the nerve to call other posters out for doing the same thing.  Hypocrite.

[albie]

the issue is the need for a price cap.

Allowing prices to rise (now on a more frequent basis) amplifies fuel poverty as a part of the cost of living increase.
Taking a percentage of excess profit back (via a windfall tax for example) is better than nothing if that money is directed to those in need, but it normalises rising cost of energy in the wider economy.

This is undesirable, and does not change the way the energy economy operates.
The creation of profit to shareholders, and the inflation of stock equity to boost dividends, remains the goal of the sector.

I heard Truss on R4 saying that the energy problem was a failure to renew nuclear at an earlier date.
This is complete nonsense, as the unit cost of nuclear to consumers is way above the cost of renewable generation.

Anyone arguing for a windfall tax does not understand how the energy economy works, and what the relationship is between that business model and the relief of fuel poverty.

I have yet to hear anyone joining the dots to connect such a tax with a price cap.......until they do, they should be regarded with some skepticism.

[SydneyRover]

Interesting numbers there from Hound. They really make the point.

The Labour Govt made a big move towards encouraging insulation from 2007. That was hard wired in for the first few months of the Tory Govt. Between 2008 and 2012, the numbers if houses with adequate loft insulation rose from 21% to 34%. Then, under Austerity, the Tories cut the funding. Over the next 8 years, the rate of increase collapsed, so that it only hit 39% by 2020..
This is a regular con by the Tories. Choose the start date so they get credit for policies they opposed and then cut. It's obviously working on Hound.

If we'd carried on at the 2008-12 rate, there'd now be 85% of homes with adequate loft insulation. Yes it would have cost a lot. But it would also have put people to work during the worst decade of economic growth in 200 years. And we'd be in a far better position now, with the majority of homes using less energy on heating day in, day out.

The energy savings and returns over time would have been a huge step in the right direction with a fairly low tech solution

[SydneyRover]

the issue is the need for a price cap.

Allowing prices to rise (now on a more frequent basis) amplifies fuel poverty as a part of the cost of living increase.
Taking a percentage of excess profit back (via a windfall tax for example) is better than nothing if that money is directed to those in need, but it normalises rising cost of energy in the wider economy.

This is undesirable, and does not change the way the energy economy operates.
The creation of profit to shareholders, and the inflation of stock equity to boost dividends, remains the goal of the sector.

I heard Truss on R4 saying that the energy problem was a failure to renew nuclear at an earlier date.
This is complete nonsense, as the unit cost of nuclear to consumers is way above the cost of renewable generation.

Anyone arguing for a windfall tax does not understand how the energy economy works, and what the relationship is between that business model and the relief of fuel poverty.

I have yet to hear anyone joining the dots to connect such a tax with a price cap.......until they do, they should be regarded with some skepticism.

I wouldn't think those arguing for a windfall tax are suggesting it's the solution Albie but part of a mix of measures that need to be addressed. The government wringing it's hands and posting hutjob ideas shows that it cannot deal with more than a single issue at any one time. #10 led by johnson is acting as a drunk on a bender thrashing around without any long term well thought out permanent solutions to anything is not serving the country well.

Insulating homes.
Windfall tax on fossil fuel companies.
Expansion of heat pump subsidies.
Expansion of renewable energy solutions.
Overhaul of the retail energy supply.

All the above and more should have been well advanced by now and not just to solve the immediate crisis.

[River Don]

It amused me to hear Johnson proclaim, Labour failed to invest in nuclear!

... How long have the Tories been in power? And how expensive is nuclear energy?

I can tell you now this shining fleet of new nuclear power stations he's promising is about as likely to arrive as a new airport in the Thames or a road bridge to Northern Ireland.

[Filo]

Interesting numbers there from Hound. They really make the point.

The Labour Govt made a big move towards encouraging insulation from 2007. That was hard wired in for the first few months of the Tory Govt. Between 2008 and 2012, the numbers if houses with adequate loft insulation rose from 21% to 34%. Then, under Austerity, the Tories cut the funding. Over the next 8 years, the rate of increase collapsed, so that it only hit 39% by 2020..
This is a regular con by the Tories. Choose the start date so they get credit for policies they opposed and then cut. It's obviously working on Hound.

If we'd carried on at the 2008-12 rate, there'd now be 85% of homes with adequate loft insulation. Yes it would have cost a lot. But it would also have put people to work during the worst decade of economic growth in 200 years. And we'd be in a far better position now, with the majority of homes using less energy on heating day in, day out.

Another cheap shot at me in that post by bst who has the nerve to call other posters out for doing the same thing.  Hypocrite.

From the master of cheap shots lol!

[drfchound]

Interesting numbers there from Hound. They really make the point.

The Labour Govt made a big move towards encouraging insulation from 2007. That was hard wired in for the first few months of the Tory Govt. Between 2008 and 2012, the numbers if houses with adequate loft insulation rose from 21% to 34%. Then, under Austerity, the Tories cut the funding. Over the next 8 years, the rate of increase collapsed, so that it only hit 39% by 2020..
This is a regular con by the Tories. Choose the start date so they get credit for policies they opposed and then cut. It's obviously working on Hound.

If we'd carried on at the 2008-12 rate, there'd now be 85% of homes with adequate loft insulation. Yes it would have cost a lot. But it would also have put people to work during the worst decade of economic growth in 200 years. And we'd be in a far better position now, with the majority of homes using less energy on heating day in, day out.

Another cheap shot at me in that post by bst who has the nerve to call other posters out for doing the same thing.  Hypocrite.

From the master of cheap shots lol!

I am way behind you and him though.

[BillyStubbsTears]

Interesting numbers there from Hound. They really make the point.

The Labour Govt made a big move towards encouraging insulation from 2007. That was hard wired in for the first few months of the Tory Govt. Between 2008 and 2012, the numbers if houses with adequate loft insulation rose from 21% to 34%. Then, under Austerity, the Tories cut the funding. Over the next 8 years, the rate of increase collapsed, so that it only hit 39% by 2020..
This is a regular con by the Tories. Choose the start date so they get credit for policies they opposed and then cut. It's obviously working on Hound.

If we'd carried on at the 2008-12 rate, there'd now be 85% of homes with adequate loft insulation. Yes it would have cost a lot. But it would also have put people to work during the worst decade of economic growth in 200 years. And we'd be in a far better position now, with the majority of homes using less energy on heating day in, day out.

Another cheap shot at me in that post by bst who has the nerve to call other posters out for doing the same thing.  Hypocrite.

From the master of cheap shots lol!

It wasn't a cheap shot. It was an evidence based observation. Hound has somewhere picked up information which superficially implies that the Tories have done a fine job, when the truth is very different. It's not a cheap shot to point out that he seems to have been misled by that.

[Filo]

Interesting numbers there from Hound. They really make the point.

The Labour Govt made a big move towards encouraging insulation from 2007. That was hard wired in for the first few months of the Tory Govt. Between 2008 and 2012, the numbers if houses with adequate loft insulation rose from 21% to 34%. Then, under Austerity, the Tories cut the funding. Over the next 8 years, the rate of increase collapsed, so that it only hit 39% by 2020..
This is a regular con by the Tories. Choose the start date so they get credit for policies they opposed and then cut. It's obviously working on Hound.

If we'd carried on at the 2008-12 rate, there'd now be 85% of homes with adequate loft insulation. Yes it would have cost a lot. But it would also have put people to work during the worst decade of economic growth in 200 years. And we'd be in a far better position now, with the majority of homes using less energy on heating day in, day out.

Another cheap shot at me in that post by bst who has the nerve to call other posters out for doing the same thing.  Hypocrite.

From the master of cheap shots lol!

It wasn't a cheap shot. It was an evidence based observation. Hound has somewhere picked up information which superficially implies that the Tories have done a fine job, when the truth is very different. It's not a cheap shot to point out that he seems to have been misled by that.

It’s only a cheap shot if you post it

[BillyStubbsTears]

By the way.

Chart G on page 19 of this report (page 22 of the pdf) is the Govt's own summary.

https://www.google.com/url?sa=t&source=web&rct=j&url=https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/970064/Detailed_Release_-_HEE_stats_18_Mar_2021_FINAL.pdf&ved=2ahUKEwiD0-7fmOv3AhWIQkEAHewIDNgQFnoECAUQAQ&usg=AOvVaw157XIT2I9M7QFulKJAuZC6

Absolutely shameful.

[BigH]

Back to the OP. We don’t have to re-nationalise but we can force the hand of the energy companies through OFGEM.

Example; why are we as individuals being offered loan facilities to pay bills? Get the energy companies to borrow from the government instead (cheaply and on soft terms) to fund energy costs so that consumer bills can be capped.

Ah, I hear you say, but then the energy companies won’t invest in the necessary infrastructure. Nonsense. And if they don’t then get the government to invest and lease the infrastructure to the energy companies.

If I were running an energy company, I’d be pleading with government to come up with a joint plan. Because, if not, then by Spring next year I’ll be facing the same reputational damage that the banks suffered in the banking crisis.

There are plenty of levers to pull here but the government, through OFGEM, seems intent on doing nothing and leaving it in the lap of the consumer.