Warning that energy prices will rise

Graham_Devon

This warning comes from the Ofgem watchdog cheif.

The warning is that the UK is not producing enough of it's own power, and therefore, prices will have to rise for the consumer.

Consumers are being warned they face higher energy bills as the UK becomes more reliant on energy imports.

In a speech, Ofgem chief executive Alistair Buchanan will say that falls in Britain's power production capacity are likely to lead to more energy imports and customers paying more.

The energy watchdog predicts power station closures could mean a 10% fall in capacity by April alone.

Now, I don't mind prices rising, if the need is geniune. But how genuine is it?

Should power companies not be investing in the infrastructure needed to make their business work? Would, for instance, Sainsbury's get away with saying "prices are going to have to increase as we don't have room to store food". No...as competition would see to this.

However, what role does the government play in all of this?

As was stated on the radio, the energy companies are making few people extremely rich, while making more and more poorer.

Your thoughts? Is it justifiable to simply up the prices, the profits, and do little to invest?

http://www.bbc.co.uk/news/business-21501878

wotsthat

Graham_Devon wrote: »

Should power companies not be investing in the infrastructure needed to make their business work? Would, for instance, Sainsbury's get away with saying "prices are going to have to increase as we don't have room to store food". No...as competition would see to this.

Massive investments are required which I think the energy companies are willing to invest but not without some guarantee from the government about potential returns. It's a regulated industry so why commit billions and then find out the government has decided that the energy has to be supplied unprofitably. Government need to get off the pot on this one.

If Sainsburys under-invest in storage depots you can shop at Asda instead. It's different.

Wookster

This is the fruits of Labour's inaction: 13 years where no additional power generative capacity was added. Add to that we still have politicians procrastinating on our energy needs and dilly-dallying over shale gas and other sources of energy.

Of course this will have an impact on energy prices!

You can thank Labour principally and the coalition as well.

Graham_Devon

wotsthat wrote: »

If Sainsburys under-invest in storage depots you can shop at Asda instead. It's different.

Wasn't that one of the points of privatising the energy sector?

A._Badger

Wookster wrote: »

This is the fruits of Labour's inaction: 13 years where no additional power generative capacity was added. Add to that we still have politicians procrastinating on our energy needs and dilly-dallying over shale gas and other sources of energy.

Of course this will have an impact on energy prices!

You can thank Labour principally and the coalition as well.

And you can add the incessant whining of the self-styled 'Greens' who, though incapable of winning elections anywhere but in the madhouse known as Brighton, have somehow managed to infiltrate all the other parties and much of the media.

Thanks to the absurd subsidies given to wind energy and the enforced closure of perfectly useful coal fired power stations, prices certainly will rise, people will suffer and some will even die.

MacMickster

Ensuring that we have adequate energy supplies in the future should be considered a matter of national security. It is not something which should be left up to the private sector, and certainly not to foreign-controlled companies. We must not be beholden to foreign powers who could switch UK plc off at a whim.

The construction of new nuclear power stations is exactly the sort of infrastructure project that the government should be investing in immediately. Meanwhile, we should not be taking coal power stations offline merely to meet arbitrary emissions targets.

sheffield_lad

The goverments (both Labour and the previous Major regieme), have just ignored this issue. The coal fired power station have been due to close for years yet we are 2023 at the earliest before we get a new nuclear station. Gas fired power stations are a lot cleaner than coal and this can give us decent generation pre nuclear.

There is another important factor though, which is the whole world now wants power and the era of cheap fuel for houses & cars is over. The only way I can see the UK stabilising the prices (not reducing), is via shale gas.

Lets get fracking.

kabayiri

BiL is involved in this industry fairly high up.
He was telling me about the planned closure of the coal fired stations in 2015 ages back. They have known they need to cover the generation gap for some time.

Part of the reason for some of the delay seems to be the profitability of existing power stations. Plants built even as recent as five years ago are struggling to make a profit. This is a problem across Europe.

http://www.gastopowerjournal.com/markets/item/1361-eon-considers-part-closure-of-europes-most-modern-gas-fired-power-plant

It seems that the power generation companies will be especially keen to ensure any deals signed are profitable. EDF can almost write their own terms for the new UK planned nuclear installation.

coastline

Shale seems a long way off...years.

http://www.economist.com/news/business/21571171-extracting-europes-shale-gas-and-oil-will-be-slow-and-difficult-business-frack-future

spare capacity will be reduced..

http://www.economist.com/node/21564584

Maybe Labour had years to come up with something but the present government have been in 3 years ...why didn't they tackle this from day one if it was that important.

Wookster

coastline wrote: »

Maybe Labour had years to come up with something but the present government have been in 3 years ...why didn't they tackle this from day one if it was that important.

Correct, one can blame the Major government and the Labour government.

The coalition have dillydallied though. Why the Severn barrage isn't already in the advanced planning stages is quite poor.

Labour have truly failed the country (yet again).

Thrugelmir

Graham_Devon wrote: »

Now, I don't mind prices rising, if the need is geniune. But how genuine is it?

Nothing new. North sea output has been in decline for some years.

Biggest worry is that the UK will need to compete in the world market for LPG. There are no long term supply contracts in place. So price is variable.