“Britain has the highest industrial energy prices in the world”, By Doug Sheridan

“This is hugely concerning when Labour’s net-zero plans will see Britain using more electricity for cars and household heating, irrespective of it being far more expensive than gas.”

Tony Lodge writes in the Telegraph, Britain has the highest industrial energy prices in the world, has fallen out of the world’s top 10 manufacturers, increasingly risks power rationing, and is spending over £3B a year to import electricity from Europe. A generation of flawed energy policies have wreaked havoc and the problem is getting worse.

Britain’s prices are nearly 50% above the IEA median for industrial electricity and 80% above the median for domestic users. This is hugely concerning when Labour’s net-zero plans will see Britain using more electricity for cars and household heating, irrespective of it being far more expensive than gas.

Following its launch in Oct, NESO released its Winter Outlook which forecast peak power demand would be 44.4 GW at any one time. Last week saw demand close to 50 GW… just as output from wind turbines had fallen away and there were problems importing power from Europe.

Britain’s chronic lack of gas storage, at just 12 days, is also failure of national planning. While France enjoys storage at 113 days and Germany at 89, the failure to act will now encourage suppliers to charge more when demand spikes on cold days. Why wasn’t storage prioritized, especially after Putin’s invasion of Ukraine?

UK energy policy represents one of the biggest failings in statecraft since WWII. Between 2004 and 2021, before the war in Ukraine, the industrial price of energy in Britain almost tripled. Electricity prices have again doubled since 2019. This has led to a huge slice of Britain’s manufacturing base already choosing to relocate overseas. Since 2010, over 200,000 manufacturing jobs have been lost. As a share of GDP, manufacturing has halved since the 1990s.

A failing energy policy inflicts huge pain on UK households, industry and the wider economy. It restricts investment, offshores energy-intensive industry, and stunts job creation. The UK must urgently address and tackle how and why a generation of political leaders and civil servants have failed... and continue to do so.

Our Take 1: Because ideas in the UK often find their way to the US—along with our belief the UK is failing to achieve its potential as a nation—we've been vocal about our frustrations with UK energy policies. This includes criticisms of wrong-headed initiatives implemented under Tory gov'ts led by May, Johnson and Sunak. But we are genuinely gob smacked at the policies being pursued in Starmer’s Labour gov’t. It’s beyond belief, really.

Our Take 2: We doubt the average Brit realizes how vulnerable UK's energy policies make the nation. But we’re pretty sure Vlad Putin has noticed… even as news surfaces that Russia’s now using its shadow fleet of vessels to snap power and data cables in the region's seas. Oh, boy.

Our Take 3: When it comes to energy, the UK’s been playing with fire for years. Unless it changes direction swiftly and surely, it seems all but certain to get burned—potentially badly.