Intervention ‘making electricity prices soar’
ELECTRICITY PRICES have soared because of constant intervention in the energy sector by successive governments, a Parliamentary report has found.
The House of Lords Economic Affairs Committee says customers are getting a bad deal from a supply system that is complicated and uncompetitive.
The result is that consumer prices have rocketed by 58 per cent since 2003, and UK industry pays the biggest bills in Europe.
The study also raises concern about the spare capacity available and the deliverability of planned nuclear power.
Committee chairman Lord Hollick said: “Poorly designed government interventions, in pursuit of the de-carbonisation, have put unnecessary pressure on the electricity supply and left consumers and industry paying too high a price.”
Meanwhile, the UK has spent hundreds of millions of pounds subsidising the burning of woody biomass which releases more emissions than coal, research has found.
Using wood – much of it imported from America – for biomass power and heat is often seen as a relatively cheap and flexible way of supplying renewable energy, but a report by Chatham House suggests the process could be more harmful than traditional energy sources. Duncan Brack, author of the report – Woody Biomass for Power and Heat Impacts on the Global Climate – wrote that “while some instances of biomass energy use may result in lower life-cycle emissions than fossil fuels”, this was not the case in “most circumstances”.
Mr Brack, who was a special adviser to former Energy and Climate Change Secretary Chris Huhne, is an associate fellow at the international affairs think-tank. Mr Huhne is now the Europe chairman of Zilkha Biomass Energy, which produces water-resistant biomass pellets which are transportable like coal. The Drax power station is capable of co-firing biomass and petcoke.