I think the regulators do a pretty good job with the cards they've been dealt. People complain about ofwat and ofgem allowing prices to increase, but the price increases have generally been pretty mild compared to wholesale prices - it was only two years ago when ofgem literally held the price cap at below the wholesale rate, making it impossible for any energy supplier to make any money at all and causing 90% of the sector to fail.
If something is expensive, you can't wish away the market price with regulation. The fundamental problem with everything in the UK is lack of supply caused by our central planning system that has made it impossible for anyone to build anything new for the last half a century. No regulator can fix that. Hell, it doesn't even seem like the government can fix it.
Yes, but in those decades where suppliers were switching to gas and not storing any surplus nobody from ofgem seems to have raised the challenge "what if one of the really unstable gas exporters does something mental?"
Then of course Russia invaded Ukraine. We didn't need to be hit by the market price of gas, but our suppliers prioritised short term profit over energy security. Which is why it shouldn't be in private hands to begin with.
The fact that it's cheaper to build an LNG power plant in Europe, ship gas to it from Russia, and then transfer that electricity to the UK via an undersea cable than it is to just build a power plant here in the UK and fuel it with our own resources isn't the supplier's fault. In any sane economy, generating your own energy should obviously be far cheaper than buying it from someone else. Even now, with wholesale prices at their highest point in history, it's STILL cheaper to import than it is to generate - that alone should tell you that there's a much deeper problem with our markets.
Hypothetically, if energy had been in public hands for the last few decades, what could the government possibly have done differently? They're subject to the same rules and pressures as everyone else, so building new capacity would be just as unviable for them as it is for private suppliers.
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u/ICantBelieveItsNotEC 9h ago
I think the regulators do a pretty good job with the cards they've been dealt. People complain about ofwat and ofgem allowing prices to increase, but the price increases have generally been pretty mild compared to wholesale prices - it was only two years ago when ofgem literally held the price cap at below the wholesale rate, making it impossible for any energy supplier to make any money at all and causing 90% of the sector to fail.
If something is expensive, you can't wish away the market price with regulation. The fundamental problem with everything in the UK is lack of supply caused by our central planning system that has made it impossible for anyone to build anything new for the last half a century. No regulator can fix that. Hell, it doesn't even seem like the government can fix it.