The energy crisis shows exactly why this industry should be in the hands of the people Christine Berry

L.During the week, a power company light bulb saw 25 companies go to the wall and suffered the latest and greatest bloodshed. The “Special Management” emergency procedures were used for the first time, and the bulb was effectively saved by the taxpayer so as not to leave 1.7 million customers without electricity. As a result of the energy crisis in the United Kingdom, oil prices have risen sharply this summer, leaving millions of households in dire straits. Sounds familiar?

Soon large power companies overpowered It was a big political issue. People in the United Kingdom paid more for their labor and were less satisfied with their suppliers than anywhere else in Europe. Every summer thousands of people die because they could not heat their homes. We are told that free market free air will solve these problems in the brain by releasing the broken energy system in the UK. A.D. When Ed Miliband first planned the price of energy in 2013, he was condemned as a crazy Marxist – only when conservatives accepted his policy four years later.

But recent events have brought us a whole new world. The competition failed precisely and precisely. The once-over-the-top and over-the-top poverty alleviation agencies are now considered irresponsible, careless and “evil runners.” Meanwhile, Big Six is ​​enjoying a new level of heroism by respectfully declaring the need for a “sustainable and responsible supplier market” – in other words. Companies are aiming for higher energy prices, complaining that rising gas prices have led to unsustainable losses.

So how can we understand all this? We have to start with the most important but not surprising facts: The power supply companies – the companies that buy electricity and gas – are not the owners of our power system.. They are basically mediators. Buy power in the wholesale market, sell it to you and put the difference in your pocket. They are not responsible for generating the energy that keeps your lights on or running the networks that supply your home. In practice, some of the Big Six companies do some of these things – but the law requires them to do these activities separately from the people who pay you bills.

The next obvious question is why the earth’s power system is designed in this way. The answer is ideology. In the 1980s, the Tucher government was in trouble. He was determined to privatize the power stations and grids that produced and supply our energy. But the doctrine of efficient marketing did not work for a natural monopoly system like the railway line. The solution was to create a completely new “power supply” function; The goal was to turn this natural monopoly into an artificial market.

The theory is that this forces companies to compete with their customers – lowering costs and increasing investment. But the reality was different. Customers have little difficulty converting and as long as wholesale energy costs are low, the new system was to print money. With the onset of competition, opportunities for new incomes have doubled. This is a business with high fixed costs and a huge economy. Companies need a “fencing strategy” to control the risk of yo-yoing wholesale. This supports large companies that have the potential to hire full-fledged people to negotiate future energy prices in the financial markets. When Big Six makes a “good run” for unsuccessful competitors, what they really mean is “less than that.” It is their large size and access to capital, not advanced skills, that have made our energy system stand out as the last titans.

It also undermines a different perspective on how this competition will shape the market. Lisa Nandi’s outspoken attitude when announcing the 2020 Labor Leadership Concern: “If I’m true, I think it would be a waste to nationalize the energy companies. Money. Establishing municipal energy companies and energy partnerships in the country is a great way to disrupt them. She was not alone in this hope. Many in Germany and Denmark were inspired by the improvements in environmental, democratic renewable energy, and thought that the UK could copy this with municipal companies such as Nottingham Robin Hood Energy.

But these cunning young Davids were, in the end, nothing like Goliath. All in all. They entered after the 2018 market turmoil. Even if they succeeded, they could not bear the burden. The phrase “municipal energy” depicts cities producing their own energy and distributing it to local people. However, if the grid owned by private monopoly companies was not controlled, it was not within the authority of the local authorities to do so. They simply played the part of the wholesale market in a fraudulent game.

It is not wrong for activists to want a decentralized and democratic green energy system. Although the grid itself is a natural monopoly, the energy it provides – and has it – can be generated by a variety of democratically owned renewable sources, from community solar energy to wide coastal winds. But trying to compete with the big six without leaving the rest of the system was a no-brainer. Moreover, free energy markets – the model currently being shipped from across the UK to Europe – have really undermined efforts.

Attempts to create a competitive energy market have resulted in many problems rather than solutions. Opposition parties have stated they will not run in the by-elections. And big corporations that claim to be the only ones that can handle the risk of inflation need to explain why this is a good choice. By the way, as last week’s guarantee shows, they will be social in any case when pressure comes to stop these risks. The reason why the government does not allow an organization like a light bulb to fall is simple: Power supply is an important public benefit. So why not treat it as one?

Leave a Comment