THE GREAT ENERGY RIP-OFF

Energy firms are one again under pressure to cut domestic prices after an Ofgen (the energy regulator) report suggested their profit margins were up. While the Ofgem report noted that the average net margin for supplying the average gas and electricity customer was £105 a year in February 2009, up from £75 a year in November 2008, and while this has provoked calls for firms to cut their gas prices, little will happen because Ofgen is toothless and the UK Government has little appetite regulate the allegedly ‘free’ energy market.

It is worth noting that while, wholesale energy costs have fallen for over a year; there has been no fall in the energy costs for hard pressed energy consumers.The reality is that we can no longer afford the luxury of an effectively unregulated energy market or its consequences. Ofgen has failed, it has failed to protect consumers, failed to regulate the energy companies or the so called ‘free’ energy market.



It is pretty clear to most disinterested observers that the UK Westminster Parliament and most of the parties within it are not serious about developing secure sustainable energy supplies, they are more than happy to benefit from windfall taxes when energy company profits go up and happy to be wined and dined by the large energy companies (who are well known for throwing their money around during the Party Conference season) – at the consumers expense - but not happy to regulate their reckless profiteering.

The Energy companies, reaping a 500% increase in profits over the last half a decade, were pretty quick to blame rising oil and gas prices, and even quicker to rake in the profits – the average annual dual fuel bill rose from £662 a year in 2005 to 1,048 in 2007. The UK Government was very happy to rake in the extra tax revenues – the only real loser in this pretty picture was us, the energy customers.

The so called energy free market has failed, we have a monopoly on energy supply in the UK; the number of energy supply companies fell to six in the last ten years, with less that £30 differential between all of the energy supply companies, which works out to be no more than a few pence a week difference in bills, what we have is an energy cartel which brings minimal benefit to hard pressed energy customers, maximize profits at our expense and does not plan for the medium to long future.

We are in the midst of a particularly hard winter,which as yet shoes no sign of abating, many ordinary people are beginning to dread the energy bills that will drop through the letter box when spring comes around. No one, in a civilised 21st century country should ever be forced to make a literal choice between putting food on the table for their family and heating their home, our older people should not have to worry about whether or not they put the heating on, but that’s where many people now find themselves.

Not that long ago families could live on one salary, but, not anymore, today people are working all hours of the day to cope. A situation has now arisen where we have a culture that actively rewards greed and recklessness in the City of London (and beyond), which has promoted a vast increase in credit, and fed what became an absurd house price boom – that is how we have arrived at the credit crunch which has brought real economic hardship for many and yet continues to enrich the few at our expense.

Back in January 2010, Natural Gas prices rose to their highest level in 10 months (reaching 45p per therm) and this triggered the import of extra gas from Belgium and Norway via the natural gas (liquefied) importation terminal in Kent.So what you may ask? Well aside from the prospect of higher energy bills (and higher profits for the energy cartel (sorry companies) and even more tax for Gordon Brown’s government.

Now while other countries insured themselves against external shocks to their energy needs; successive UK Government’s entirely left it to the market (stop me if this sounds a bit like what happened with the banks) to sort out – so what did the energy companies do, they chased quick short term profits at our expense. The UK’s market driven approach has been entirely and utterly inadequate. Thirteen months ago as of January 2009, France could store 122 days of gas and Germany 99, the UK had storage capacity which would only 15 days and frantic efforts have been made to increase storage capacity.

In the 1980’s and 1990’s developing a long term energy strategy or making sensible long term decisions in relation to energy supply was never an option for the Tories during their last tenure on government. Likewise, the New Labour Government (and the nominal Conservative opposition) took the best part of a decade to recognise the need to increase storage capacity.The abject inheritance of the Conservatives privatisation of the energy companies is one of enshrined self-interest, short term profiteering and an utter absolute failure to plan for the UK's future energy needs.

As I have said before and will say again (and again) it should be a matter of urgency that the Westminster Government, the Scottish Parliament, the National Assembly and the Northern Ireland Assembly should work with the Irish Government to make these islands entirely self sufficient via renewable non market driven energy resources. If we develop a flexible self-sufficient energy development strategy within these isles that encourages decentralised microgeneration schemes and by actually implementing it could create jobs, useful skills and help to bootstrap the economy out of the developing recession as well as helping consumers.

There are many things that can be done to rectify this situation. On a UK level we need firm regulation of the energy sector, excessive profiteering must be curbed and we need a windfall tax on excessive profits. We need to break up the effective energy cartel, which neither supplies the needs of the energy customers or the UK's medium to long term energy needs, they only service the needs of shareholders. We need a series of public private partnerships to develop sustainable alternative energy resources and we need a firmly public owned planned national grid that is flexible enough to deal with small scale energy suppliers.

Here in Wales, the Plaid driven One Wales Government should be working flat out towards improving the energy efficiency of business operations and production processes to reduce CO2 equivalent emissions and to cut down on waste. We also need to encourage the development of new cleaner technologies and processes for businesses and promote the use of sustainable infrastructures with regard to energy and waste.

We need to welcome with open arms local plans to develop local energy plans, local energy supplies and welcome the development of community owned and community beneficial sustainable energy plants. We need new local authority planning guidelines and proper feed-in tariffs to rapidly promote the incorporation of small-scale renewable energy installations and much better insulation in individual homes, commercial and public buildings and groups of buildings - this is essential.

To make any of this happen, we needs a realistic and flexible energy strategy that will allow and encourage the creation of sustainable green energy job opportunities for our people and take full advantage of the extraordinary natural resources we in Wales are blessed with. If this happens, then there is absolutely no reason why Wales should not be amongst the most progressive countries in the field of sustainable alternative energy and sustainable green jobs and the UK can end it's dependence on fuel supplies from unstable regions and unsavoury regimes.