From the Wall Street Journal, via GWPF
On Thursday, the U.K. power regulator Ofgem announced it would refer the six biggest power companies to the antitrust authorities for investigation. Not that there’s any evidence of price collusion, mind you. It’s just that prices for consumers rose by about 9% last October, outpacing the increase in wholesale prices, and so politics demands that something is done.
To anyone who is economically literate the price increases come as no surprise, since Britain faces electricity shortages. A cold winter would push demand to 95% of capacity, meaning a real risk of blackouts.
When markets are working properly, shortages lead to higher prices, which in turn lead to investment in new supply. But U.K. generating capacity is expected to fall further as obsolescent oil and coal plants close. The government is pleading with producers to restart gas plants that are mothballed because they operate at a loss. So why aren’t energy companies putting their increased profits into building new oil and coal plants?
In the last general election in 2010, David Cameron’s Conservative Party endorsed the low-carbon rhetoric of the environmental movement and asked voters to “vote blue, go green.” After winning a mandate, the Tories continued to support the 2008 Climate Change Act that commits the U.K. to reducing greenhouse emissions 80% by 2050, increasing environmental taxes on power to subsidize renewables.
A modern power plant takes about four years to build, and costs can run into the billions of dollars. So regulatory predictability is crucial. Yet both the government and the opposition continue to make green promises that destroy the profitability of the very plants that Britain relies on for its energy security.
The current investigation will only make things worse, since it means a wait of two years to see whether the big energy companies will be broken up. Meanwhile, former Conservative Prime Minister John Major has proposed a windfall profits tax on the power companies. And Labour leader Ed Miliband promises to freeze power prices for 20 months if he wins next year’s election.
Last October during question time, Mr. Cameron blurted out that “we need to roll back some of the green regulations and charges that are putting up bills.” He was promptly attacked by the environmentalists in both his own government and the opposition. Britain’s politicians remain determined to blame greedy power companies for gouging consumers even as they prevent those companies from building economical plants. Who will they blame when the lights go out?
Tallbloke's Talkshop 
There’s a damn sight more ‘competition’ in the power-supply market than there is in the ‘Regulation’ monopoly.
A few blackouts in the runup to the next election should focus minds on what our priorities should be.
Who will they blame?
1. Russia, causing redirection of gas/energy within Europe, with some fallout for the UK.
2. The United States, creating the problem with Russia over Crimea by pushing for sanctions even though the consequence of those sanctions is with Europe/the UK and not the US.
3. The Free-Market, for Companies taking their “excessive” profits out of the UK instead of building new power plants.
4. Consumers, for using too much power, i.e. not going personally green enough with home insulation and Snuggies for time spent in front of the living room fire (NG fire).
5. Rural homeowners for opposing wind turbines on land and at sea.
6. Green energy policies – sorry, delete that!
Five areas to blame is already more than enough to convince the voters that their Government had nothing to do with the problems.
Doug Proctor: You forgot global warming, which causes all these cold winters 😉
Would any sane company build wind farms and associate itself with this ?
With hindsight I suspect the Bedroom Tax was just an excuse to cut the disposable benefit rate to a point where is was impossible to live a decent life anymore ( and with low users paying the same amount of Green Tax on their energy bills as someone living in a centrally heated mansion complete with swimming pool ) the choice between heating or eating properly and often unable to afford to do either !
The GHG AGW hoax has been exposed for what it is. It’s ‘fracking’ time to use our carbon-based energy resources intelligently to keep the lights on, strengthen our economies so we can afford to develop cost-competitive alternative energy resources and minimize Gazprom’s influence on world affairs.
dikstr: and minimize Gazprom’s influence on world affairs.
I think we need to add Greenpeas, WWF and the Sierra club to that list.
TB: The people you should set you sights on in UK are Friends of the Earth. They’re the ones who got you into this mess in the first place.
An interesting thought?
What would happen if we all bought them and plugged in our millions of electric cars?
As someone who worked for British Gas, Transco and finally National Grid, it has been heading towards “Rationing” for a long time.
As for Blame?
Well ever since Maggie sold the family Silver IMHO.
Bashing the power companies is merely a smokescreen for their own failings.
We were lucky this winter the unusually cold weather in the US probably contributed a lot to our mild winter.
Winter 14-15 may well be crunch time, blag your way out of that one Milliband,