“A long term investment is a short term bet gone wrong.”
This quote from a city banker epitomises the mentality of the bankers that gambled us into an economic crisis. Has government also adopted a short term view?
The current emphasis on switching energy suppliers and the recently released consultation on increased regulation of energy suppliers to be included in the Energy Bill raises questions about the benefits of more regulation and less focus on energy transmission, energy storage and the need for a long term sustainable energy strategy.
Some of the aspects of switching are good, for example:
- Tariffs structures are too complicated – essentially energy companies sell units of heat and electricity,
- According to DECC, customers who have never switched can save up to £200 per year by switching supplier and paying by direct debit.
However, the legislation contemplated doesn’t solve the fundamental problem with rising energy prices and could actually create overall higher prices through standardisation of tariffs, by creating higher administrative costs for energy suppliers and by creating excessive disclosure. The Energy Bill does not stimulate investment in two fundamental areas that we need to lower energy prices forever:
- Move away from fossil fuel generation to renewable energy lowering our vulnerability to rising wholesale prices,
- lower consumption by improving energy efficiency.
Once consumption is balanced against measureable consumption patterns and weather, a clear view is presented on which energy companies can plan their supply requirements. An improved energy bill would break up the National Grid to encourage new investment in electricity transmission and encourage investment in energy storage.
At BHESCo we take a long term view of energy prices, working with an energy supplier to help them lower their costs, reinvesting those savings in the community – providing energy as a service, because everyone is different.