‘President Francois Hollande will be rubbing his hands with glee this week when the British Government is expected to sign a deal on nuclear power that could funnel £90billion into French coffers.
The agreement with French state-owned EDF Energy will create a price the Government guarantees will be paid for the electricity generated. This is likely to provoke fury as it is twice the market level.
Osborne last week announced plans to allow Chinese firms to take a minority stake in Britain’s nuclear power industry. But remarkably, even after that announcement, the Department of Energy issued a terse statement saying the exact terms of the deal with EDF were ‘still being negotiated’.’
Read more …
Huge nuclear subsidy shows Tory inconsistency on markets
‘One of the conditions of a new generation of nuclear power stations in Britain has long been that they receive no taxpayer subsidy. The Coalition Agreement stated:
Liberal Democrats have long opposed any new nuclear construction. Conservatives, by contrast, are committed to allowing the replacement of existing nuclear power stations provided that they are subject to the normal planning process for major projects (under a new National Planning Statement), and also provided that they receive no public subsidy.
But look at the terms of the deal on a new nuclear power station at Hinkley and it become clear that, by any reasonable measure, this commitment has been broken. The agreement guarantees the French-owned EDF and Chinese state investors a strike price of £92.50 per MegaWatt Hour (or £89.50 if a second plant is built), nearly twice the current market rate for wholesale energy.
The price will rise in line with inflation and is guaranteed for 35 years. Should wholesale prices fall or rise at a slower rate than expected, it is the public who will pick up the tab in the form of higher taxes or higher bills. The Energy Institute at University College London estimates that the annual public subsidy will be £800m-£1bn.’
Read more …
Millions hit as npower raises energy bills by £137
‘
Npower will increase gas and electricity prices by just over 10pc from December, affecting three million customers. It is the largest price rise by an energy provider so far this autumn.
The energy firm announced on Monday that gas prices will rise by 11.1pc and electricity prices will increase by 9.3pc from December 1.
Npower is the third of the biggest six suppliers to announce price rises, following SSE and British Gas, and blamed the increase on the cost of delivering energy to homes, the cost of raw materials and government levies.’
Read more …
The energy market is failing. Time to reform it
‘The Big Six currently suffocate the market. They produce 70pc of the energy, can sell it to themselves in bilateral trades and then sell it on to the consumer. At present, a lot of energy is traded via such secret backroom deals, with the equivalent of just 6pc of electricity consumption volume traded on an open market.This has lead to a widespread concerns about cost inflation. The generation arm of a big utility can sell its energy to the retail side of the business, at a cost they determine without reference to the wider market. This can artificially decrease the profit margin on the retail side, while boosting it in generation, passing profit back along the supply chain. When energy suppliers claim to be making a “modest profit margin of 5pc”, they refer to retail profits – generation profits are much higher, and in some instances exceed 20pc. The large suppliers are able to extract huge profits from their consumers, but the current system enables that fact to be disguised.’
Read more …
