Despite a significant drop in wholesale natural gas prices, UK households face yet another hike in energy bills, revealing deep-seated flaws in the country's energy pricing system.
I have wondered, and perhaps you can explain, why is fuel and energy produced in the UK for use in the UK priced at an international market rate? Could be not pass an act of parliament and mandate all UK produced fuel and energy must be offered on a local market first and excess, unbought energy can be sold on the international market. You then cap the local market price to, say, production cost plus 20% or international market price minus 20%, and the next day you have lower energy prices... obviously it would have to be phased in due to existing investment and hedging but it seems illogical for a critical national resource to be priced based on international demand
There are definitely benefits to a globally open energy market, and put simply UK producers sell at international prices because they can, so if they were forced to sell below that, it could drive investment away and risk underproduction, so we are currently too far gone in that regard. That being said, there are ways to soften the blow to consumers while maintaining an open energy market, such as through windfall taxes and increased strategic reserves. Additionally, the development of renewable energy sources has aimed to address this, yet this is a long-term objective, and there needs to be renewed focus on ways of increasing energy security and independence, which isn't purely based on renewable development that could be a decade away.
I have wondered, and perhaps you can explain, why is fuel and energy produced in the UK for use in the UK priced at an international market rate? Could be not pass an act of parliament and mandate all UK produced fuel and energy must be offered on a local market first and excess, unbought energy can be sold on the international market. You then cap the local market price to, say, production cost plus 20% or international market price minus 20%, and the next day you have lower energy prices... obviously it would have to be phased in due to existing investment and hedging but it seems illogical for a critical national resource to be priced based on international demand
There are definitely benefits to a globally open energy market, and put simply UK producers sell at international prices because they can, so if they were forced to sell below that, it could drive investment away and risk underproduction, so we are currently too far gone in that regard. That being said, there are ways to soften the blow to consumers while maintaining an open energy market, such as through windfall taxes and increased strategic reserves. Additionally, the development of renewable energy sources has aimed to address this, yet this is a long-term objective, and there needs to be renewed focus on ways of increasing energy security and independence, which isn't purely based on renewable development that could be a decade away.