Ruinous green policies mean rising profits for UK energy companies

CityAM.com reports:

YESTERDAY the Energy and Climate Change Select Committee released a report arguing that energy regulator Ofgem should force energy companies to produce more detailed financial information. One of the members of the committee – John Robertson MP – told the BBC that he needed to be able to assess whether the profits of the energy companies were excessive.

It is a testament to the poor quality of financial education in the UK that preening politicians are allowed to get away with that kind of posturing. Either the MPs do not understand the consequences of the regulations they proudly vote through Parliament, or they do and this is a very unpleasant attempt to fool the public.

It is really not complicated: the government wants to radically increase our use of renewable energy, which is both very expensive and very capital intensive. To meet government targets, Liberum Capital estimates that the energy sector will need to invest £161bn by 2020 and another £215bn between 2020 and 2030. That means £376bn in total, of which only £151bn would be needed without government targets.

All of that investment has to be paid for, and that means higher profits in the energy sector. All of those profits have to be paid for, and that means higher prices for consumers. There is just no way that the government’s policy can work without much higher profits in the energy sector and much higher prices for consumers.

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2 thoughts on “Ruinous green policies mean rising profits for UK energy companies”

  1. “There is just no way that the government’s policy can work without much higher profits in the energy sector and much higher prices for consumers.”
    The policy isn’t going to work even with the higher profits going into useless projects — so they aren’t really profits. They’re more like a tax collected through the energy companies and spent on government orders to do wasteful things.
    The preening voters elected the preening politicians. In a Darwinian sense, voters have to adapt and learn and vote differently or they are going to continue to suffer the consequences of voting for stupid. That’s bad enough, but the votes for stupid affect people who voted smarter.
    “They told me if I voted for Romney that…”

  2. So the British power companies, like the US power companies, get to pass the cost of great green ideas on to the consumer and make a profit doing it. It makes it easy for them to go along with any great idea and be very, very green because it is not their money. Part of the price you pay for the lights coming on every time you flip the switch, barring a major weather event. It is also part of the price you pay for being able to complain and having the politicians take up your complaint when the major weather event shuts off your power.

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