Why are UK energy prices so high?

The UK has very expensive electricity for both the industrial sectors and consumers, despite the government’s policies that are intended to deliver the exact opposite. It’s damaging not only the dwindling remaining energy-intensive industries in the UK, but also any potential future ones, including all the AI and data centres. A quick look at the existing energy generation assets in the UK, and the high energy costs are perhaps not such a surprise. These assets are relied upon to deliver secure, firm power, but fast-tracking the renewables generation route by 2030 means that all the energy sources become intermittent. While Ed Miliband, Secretary of State for Energy and Climate Change, continues to tell us that renewables costs are nine times cheaper, this is far from the reality of what the true system costs of energy are. If they were, the UK would already be outcompeting the US. It obviously isn’t. In this podcast, Dieter Helm looks at an alternative approach to setting competitive electricity prices, going back to how energy prices were set in the days of the Central Energy Generating Board, before privatisation.