As we approach conference season, with the cost of living at the top of the political agenda and green policies under attack for their cost, energy policy is guaranteed to stay in the political spotlight. Although there is a broad consensus on the measures in coalition’s latest energy bill, the dividing lines at the next election are starting to emerge. Labour are advancing towards ever tighter regulation of the “big six” suppliers, taking greater political control of the sector but also creating huge barriers to entry. Under Labour we could expect the six to shrink even further.
On the other hand, Conservatives are forging an agenda to encourage competition, innovation and greater consumer choice by attracting new entrants into the market, banking on more competition, diversity and choice to deliver a better deal for consumers.
When the UK electricity sector was privatised in the 1990s, one vast state-run monopoly became a teeming market of new firms, competing for the business of the British consumer. Thirteen years of Labour government put a stop to that. By 2010, just six energy companies controlled over 90% of the UK sector. So where do we go from here? We certainly need big, successful national energy players, with balance sheets capable of supporting huge investment in new UK energy projects, as well as of helping us compete in the global race for jobs and growth. Indeed, Britain can lead the world in offshore wind and new nuclear. But technologies such as these are an important part of a diverse energy mix, not the entire recipe.
(Greg Barker, originally published by The Guardian)