Ofgem is frogmarching Britain into energy rationing oblivion

Surge pricing stands to deepen the divide between the country’s haves and have nots.

Bring back the Central Electricity Generating Board (CEGB), all is forgiven. No really. This is a lament born not out of nostalgia for some imagined, flawless past that never really existed, but of genuine concern for the increasingly dysfunctional, opaque and ever less secure nature of today’s UK energy markets.

And they could be about to get even more complicated and impenetrable, with proposals by the energy regulator Ofgem to further frogmarch the nation into “smart meter” oblivion by abolishing the current price cap regime in favour of “surge pricing”, where the price varies according to overall demand.

The Telegraph has the story.

Theoretically, you would then be able to reduce your energy bills by confining your usage to off-peak times, or – reductio ad absurdum – cease paying altogether by not using any electricity at all.

Whatever its faults – which were admittedly legion – you at least knew where you stood with the CEGB. As a state-owned electricity behemoth, the CEGB had just one function; to ensure that the lights stayed on or, in other words, that growing demand for electricity was always satisfied. 

For the consumer, there was none of today’s faffing around with price comparison websites, none of the worry about what deal you were on and whether there might be a better one hiding behind all the others; instead, there was one price, ultimately determined, like a tax, by government ministers with at least half an eye on the ballot box.

Even so, the system sort of worked. Outages were rare, unless caused by striking miners, and although there were some ruinously expensive wrong turns – such as the decision to bet the nation’s nuclear future on British-designed Advanced Gas-Cooled Reactors – the CEGB broadly met its purpose. Run by engineers, and not accountants, this was to provide the economy with electricity, pure and simple.

Sadly, the same cannot be said about the horlicks that are today’s energy markets. 

The intention behind the breakup of the CEGB and the subsequent privatisation of its various moving parts was – besides raising money for the Exchequer – to put the consumer firmly in the driving seat.

Yet it was not to be. The industry never fully escaped political interference and is today so complicated and highly regulated that it would challenge the intellect even of Sir Walter Marshall, the noted nuclear physicist who with a tyrannical grip for years ran the CEGB, to properly understand it.

It’s fair to say that, when it comes to domestic and business energy supply, privatisation hasn’t worked as hoped, in sharp contrast to telecommunications, where it has hugely improved quality, choice and price. 

Always guaranteed to make a bad situation even worse, into this quagmire steps the industry regulator, Ofgem, with proposals for “surge pricing”, a concept that rests substantially on the ability of suppliers to strongarm the rest of the nation into the snake oil world of “smart meters”.

Read the full story here.