The Covid lockdown has resulted in a big drop in energy consumption and because of the government’s strange system of contracts will result in a big increase in home energy bills. Covid has exposed the fundamental flaws in this whole system of funding new energy generation. The government intends to tie us into tens of billions of pounds of these contracts over the coming years, for everything from new nuclear power stations to solar and wind energy. Contained in these contracts is a guarantee that energy payers will pay high energy prices whether or not the wholesale price is much, much lower, and whether or not we use much less energy.
We have used much less energy while in lockdown, and it has essentially bankrupted the government’s whole energy generation scheme. As we embark on the rapid reduction in energy consumption that is necessary to reach net-zero carbon emissions, then we will see the same thing happen again and again. It is a stealth tax which is deeply regressive and pushes the burden of costs onto the fuel poor and disadvantaged while the wealthy barely notice the difference.
The government should abandon this bankrupt contract system and instead bring their energy generation and energy efficiency schemes into normal government capital investment, to be funded by progressive taxation.