Electricity re nationalisation has begun...

agentcain

ispookie666 said:

We will likely see the price of electricity and gas stop tracking each other with the gas price increasing disproportionately.  

Unlikely to happen as long as electricity is produced by gas because its "greener". If unit prices were detached from a wholesale market and each supplier was free to sell according to their energy source, you would immediately see consumers sourcing their energy from coal-based suppliers. Should more coal be allowed to be used in energy production, that may well happen. 

agentcain

BUFF said:

They are projecting zero or near zero profits before interest, taxes, depreciation & amortisation. & after those? EDF is heavily burdened with 43billion euros in debt upon which it has to pay interest.
Yes, they won't go bust because the French govt. is the majority shareholder but the French people may well end up paying for it one way or another. As the article says the govt. may be considering renationalising EDF due to "the critical situation".

I think I would prefer to subsidise a failing nationalized utility service rather than a privatised stakeholder profit pot any day of the week. One would think that asset liquidation would be newsworthy upon any supplier going bust, but as always "privatise profits, nationalise debts".

BUFF

I come back to the upcoming French elections having nothing to do with the decision to only raise their (with majority being owned by French govt.) prices by 4% & thereby run at a loss ... 

One way or another the populace bear the brunt.

Thrugelmir

BUFF said:

They are projecting zero or near zero profits before interest, taxes, depreciation & amortisation. & after those? EDF is heavily burdened with 43billion euros in debt upon which it has to pay interest.
Yes, they won't go bust because the French govt. is the majority shareholder but the French people may well end up paying for it one way or another. As the article says the govt. may be considering renationalising EDF due to "the critical situation".

Governments only have one primary source of income and that's tax. Forcing EDF to buy in electricity and sell it at a loss is pure politics. Bound to come back and bite Macron if the current state of play doesn't change soon. Everybody loves free lunches .........

agentcain

I didn't see that sort of attitude when BoJo government enforced several lockdowns and came up with the brilliant ideas of the furlough and the eat-out-to-help-out schemes. Was that better?

Chrysalis

Are we trying to claim ofgem has done a good job? O_o

I can already see because the government wont own the new nuclear station they have to buy the power at an elevated price instead of owning that power if they fully state funded it.

Consumption tax is great for a government, high energy prices favour them due to the VAT.

Thrugelmir

agentcain said:

I didn't see that sort of attitude when BoJo government enforced several lockdowns and came up with the brilliant ideas of the furlough and the eat-out-to-help-out schemes. Was that better?

Without furlough the core of the economy would have collapsed. Likewise hospitality is a fragile industry at the best of times. Adding to the National debt against a backdrop of rising interest rates and quantative tightening to provide cheap power is little more than a sticking plaster. The actions of millions of people to change their behaviour to reduce consumption costs nothing and has lifetime benefits. 

agentcain

You missed the part of enforced lockdowns. The government created the crisis for which these half cooked solutions were proposed. Not to mention their PPE and Track n Trace scandals.

There is no behaviour that requires changing. People need energy to keep warm, eat and entertain themselves, all of which are important. Yes, even entertainment. You want to reduce consumption? Start with the unnecessary push for EVs. Or cryptomining. 

Seems to me that you want state intervention and not really. Both cases affected mostly those less fortunate and increase the gap between poor and rich.

There's not going to be any more national debt increase compared to those measures. Centrica reported increased profits. I see no debt increase from government enforcing a lower price to eat away from these profits.