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MSE News: Government electricity plans 'provide price hike insurance'

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in Energy
This is the discussion thread for the following MSE News Story:
"The Energy Secretary insists reforms will protect consumers against the steep price rises seen in recent days ..."
"The Energy Secretary insists reforms will protect consumers against the steep price rises seen in recent days ..."
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Not Buying it 2015!
Offer accepted: £107'000
Deposit: £23'000
Mortgage approved for: £84'000
Exchanged: 2/3/16
:T ... complete on 9/3/16 ... :T
J_B.
No government can legally bind a future government, so what they do in circumstances like this is to set up a company which would enter into contracts (which would be legally binding) with energy suppliers and generators.
Beats a '52 Vincent and a red headed girl
There are few safeguards, which is why as I system I don't like it. There is ample opportunity for a company which owned a nuclear station and a gas station to simply run the nuke when power prices were low (and thus get topped up) and run the gas station when prices were high, which - since gas stations aren't in the CFD - would not result in payment back.
The system is good for attracting investment in new stations and if you're after several nuclear stations costing £50bn, you need that.
So I can see the benefits, but I fear that there will be gaming of the system which as you say the customer will be paying for.
Beats a '52 Vincent and a red headed girl
Duh! The energy and oil companies DO pay for the investments.
Beats a '52 Vincent and a red headed girl
No one wants to take on the risk and responsibility of major projects, which is what running a business in a capitalist system is supposed to be. You raise capital, by borrowing or putting up your own money, you build it, and the profit or loss is yours.
Tony Blair has created a welfare state for businesses.
Private Public Initiatives are money pits.
The government, i.e. tax payers, take on all the risk,
and the private company is virtually guaranteed long term profit.
Why would any company build a power station out of their own pocket, when they just have to hang around long enough, and the government will come up with yet another handout, which always come out of our pockets.
What we should do is wait till America nearly defaults,
hoover up on US Treasury bills, and then demand Alaska in payment.
BP already has a base in Perdue, so we just have to change the flag to the Union Jack. The inhabitants already speak English, so it's a ready made colony.
I am worried that the public is being milked by systematic market behaviour that rewards corporate speculators who dabble in the seasonal energy market. Could this this 'dabbling' ultimately increase the price of energy as seen by the consumer ?
J_B.