SNP MSP Mike Mackenzie, who sits on the Scottish Parliament’s Economy, Energy and Tourism Committee, recently commented that the high energy tariffs of recent year’s highlights the government’s failings on energy. Energy Switcheroo explores Mackenzie’s comments and why the Government is being criticised about energy policies.
Mike Mackenzie was responding on the recent Competition and Markets Authority (CMA) findings that showed that the main energy providers had implemented tariffs in recent years that were some 5% higher than recommended. .” The Competition and Markets Authority concluded that investigation into the energy sector proves that “there are millions of customers paying too much for their energy bills, when they don’t have to”. If savvy householders had switched to better tariffs, they could have saved £160 a year on average.
In defence the big six energy companies cite a four part process which makes it difficult for them to pass on cuts, even if the wholesale world value of buying energy is low. (1) wholesale; (2) transmission; (3) distribution; and (4) retail. Two are actually controlled by Ofgem, the regulator, wholesale and retail prices are not, or at least not exactly directly.
Mackenzie makes it clear that the blame lies at the feet of the Government who have failed to keep control on the energy situation, stating:
“It is clear that regulation of the energy industry by Westminster has failed consumers for many years. They should sort out the mess and help deliver lower and fairer pricing.”
He was speaking from an SNP point of view and with understandable concern for Scotland in particular, but the issue affects the whole of the U.K. With Scotland’s huge natural resources it means that they can produce power, affordably, and help the national drain on supply. Scotland has potential for high levels of tidal, wind and wave energy, notwithstanding North Sea resources which in itself is worth over £1 trillion.
The UK Government is keen on implementing measures to cut support for onshore wind. They plan to end subsidies to onshore wind farms from 1 April 2016 and this has led to concern over the future and direction of the renewable industry in this country.
Fergus Ewing, Scottish Minister for Business, Energy and Tourism, has said it is irrational to scrap onshore wind subsidies. He cites figures from the big energy provider, Scottish Power that U.K. consumers could very well be finding themselves paying between £2bn and £3bn more in bills. “It would be a risk and does not make sense to cut investment in these Green technologies,” warns Ewing, calling for addressing these vital problems rather than “making them worse.”
Nuclear generation subsidies are massive compared to wind, wave and tidal generators. After the declaration that the Government has agreed a deal with EDF to build a new nuclear power station at Hinckley Point in Somerset. It seems that the new direction is away from alternative sources and back to the massive nuclear reactors.
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