Gridlocked- Fixing Energy Starts with the National Grid

Like energy, when it comes to global free markets, fact appears far less interesting than fiction and far less lucrative than Financialisation.

The UK is self sufficient when it comes to energy supply.?50% wind ?(once?set up this is zero marginal costs have been met it is only?O & M), 15% Nuclear, solar and others ?as well?as?35% gas from North Sea so there is no?need to rely on a Gas price or the speculators.

What flows through our privatised grid, it's gas and pipeline and electric cable infrastructure, is scandalously exported only?to count as an import once the daily Amsterdam auction has agreed the European price. The 1995 privatisation of our national grid is where our problems started allowing it to facilitate the exploitation of every British citizen and business. What hope green thinking when we are being led by donkeys?

The lazy, entitled, post Empire British establishment loves creating artificial markets that facilitates middlemen or gatekeepers to profit from what is in effect a controlled market with a guaranteed income plus a subsidy when necessary.?Energy yes but ditto trains, buses, water and Health with?the UK tax payers coughing up at least twice for the benefit of shareholders.?This rigged game naturally encourages corporations to buy up the primary, secondary?and tertiary?phases of the industry supply chain.?In energy today the same owners charge a higher price at primary, then bag the subsidies at tertiary stages with the taxpayer paying for the privilege, throughout Europe.

Ushering in a globalist?facade, Margaret Thatcher privatised,?the mantra being good for the people (not oligarchs). The People would get shares although the cartel hoovered up most at the bargain priced ?IPO. Going forward they would own and control the game putting in little for improvement and infrastructure and extracting abnormal profits with?tax deal sweeteners.

The privatisation with competition simulation pretended we had a market, yet we can’t have a choice of cable or grids from competing suppliers to our homes. Monopoly is at odds with innovation driven free market competition. So the grid has to be forced into?national hands on the grounds of national?security before we do?anything.

We then reverse the other three fallacies of the UK privatisation idea.?This was the splitting of the electricity companies into?three,?namely, ?generation,?the Grid and the supply to homes and businesses.?Coal Gas and renewables) would compete in wholesale market ?and then good suppliers would buy from grid and selling to us and our businesses. They then espoused the benefit of capping the maximum price for consumers with competition driving down the price further.??These effective energy brokers were no more than Logos, straplines and boiler room sales and marketing operations. They had no power to influence auction prices,?so they were easily forced out of the market by rising prices and speculator amplification.

Europe then copied this model and, we in the UK are beholden to it, because global corporations and speculators know best. In reality they can lobby their way round rule changes that will affect the bottom line. They can also?scream for subsidies now the?has become too big to?fail.

The Problem with a pretend market is that you need rules, preferably a level of Government control with public accountability and scrutiny.

This would curb the biggest problem, namely the daily auction in Amsterdam and, no pro Brexit Government wants that in the open. In?a free market the producers with the lowest price wins,?but no,?under the Contract For Difference mechanism, the highest?marginal cost price wins. That becomes the price for the day, with all being paid that although the renewables pay surplus back to the LCCC based next door to the banks in Canary Wharf!

The CfD is a long-term contract between an electricity generator and the Low Carbon Contracts Company (LCCC). The contract enables the generator to stabilise its revenues at a pre-agreed level (the Strike Price) for the duration of the contract based. On August 6th, Ofgem decided to amend the price cap methodology to reflect the return of Contracts for Difference (CfD) payments to suppliers as a result of high wholesale energy prices.

In reality they complicate so?we don’t understand, thus the scams and price rises persist.

The solution should be the average price with the state only subsidising should the surplus profit from contracts agreed by renewables not cover the wholesale bill for the day.? Taking strategic control of, or outright nationalisation of, the national?grid would do this.

We now have price rises with central banks supporting the market for reasons of liquidity rather than?solvency?that mask the greed that led to the current systemic and structural?problems. Just like in 2008 the speculators are rubbing their hands with?glee.?Perhaps more scandalous the UK Government is lifting banker bonus caps, avoiding a windfall tax and allowing the Bank of England to support the market. Fortunately there will be jam tomorrow, or should that be some sweet ‘let them eat cake’ propaganda for 'we prols', coming in the form of reducing the cap increase with a subsidy for businesses at?the end of October.

We must?Nationalise our Grid. Ofgem must then calculate the daily average price with a view to longer term price fixes. The subsidy or surplus must then be geared towards a policy that champions a wind, wave and renewable industry. This must?champion independent innovation, not be dominated by?the very fossil fuel companies who are both poacher and gamekeeper.?

This would then pave the way for towns, local districts and their councils to run localised and coordinated energy supply solutions. The profits would go back into community wealth-building for local enterprise and not-for-profit projects. True green solutions, organic decentralised and sustainable supply chains that work for all.

Thank you for reading Neil Gentleman-Hobbs, someone fortunate enough to go through the looking glass of greed and then come out the other side a wiser person.