So David Cameron wants to force energy companies to put customers on the lowest tariff. Or does he? What the Prime Minister said was, of course, utter tosh. But is that what he meant to say? My betting is not. I suspect that the policy being considered is something along the lines of giving customers the option to move onto the cheapest tariff - or perhaps the other way around, the option to stay as they are rather than be moved onto something that the company considers to be cheaper, having done some analysis on usage patterns etc. Thereby hangs an interesting sting - until we get smart metering that analysis is just a little tricky.
There's also the problematic push-me-pull-you of wanting people to reduce energy consumption against playing to the cheap energy gallery.
And politicians don't seem to think through the fundamentals of energy issues. Take natural gas, for instance. It's a commodity. All the energy companies buy from the same sources in the same market place. All that is going to distinguish them as far as costs are concerned is the ability of their traders to time their deals cleverly, and their on-going non-product cost base. Frankly there ain't going to be much of a differential between the companies. So, surprise, surprise, competition is at the margin. Ditto for electricity.
What the country needs is to create a situation within which companies have the confidence to invest - especially electricity generators. Who would build a nuclear power station with huge up-front capital costs if there was a strong likelihood that some ill-informed politician would be forever fiddling with the market?
No comments:
Post a Comment