The logic of your argument is that we need to increase our structural capabilities to develop alternatives - even where short term price fluctuations may make these unattractive or risky from an entrepreneurial point of view. This is where the UK is seriously falling down on the job - witness the EDF move into the UK. Britons face bigger bills as French Government caps energy prices
British families could find themselves subsidising households in France after the French Government ordered a 2 per cent cap on electricity price increases yesterday. EDF, which supplies homes on both sides of the Channel, raised its prices to British customers by 22 per cent only two weeks ago. It also put up its charges for gas by 17 per cent - but it will not be allowed to increase French prices by more than 5 per cent. MPs said that the cap in France, where the law restricts energy price rises to the inflation rate, raised fresh questions about the lack of controls over Britain's liberalised energy market, which were highlighted in a parliamentary report last month. EDF, whose talks about acquiring Britain's nuclear generator British Energy came close to collapse last week, blamed its latest increase in Britain on soaring wholesale gas prices. According to Energywatch, EDF's latest increase took the price of its average electricity bill to £441 for direct debit customers. That is more than 11 per cent higher than the €500 (£396) that EDF said was the average for its electricity bills in France.
British families could find themselves subsidising households in France after the French Government ordered a 2 per cent cap on electricity price increases yesterday.
EDF, which supplies homes on both sides of the Channel, raised its prices to British customers by 22 per cent only two weeks ago. It also put up its charges for gas by 17 per cent - but it will not be allowed to increase French prices by more than 5 per cent.
MPs said that the cap in France, where the law restricts energy price rises to the inflation rate, raised fresh questions about the lack of controls over Britain's liberalised energy market, which were highlighted in a parliamentary report last month.
EDF, whose talks about acquiring Britain's nuclear generator British Energy came close to collapse last week, blamed its latest increase in Britain on soaring wholesale gas prices. According to Energywatch, EDF's latest increase took the price of its average electricity bill to £441 for direct debit customers. That is more than 11 per cent higher than the €500 (£396) that EDF said was the average for its electricity bills in France.
Yes, governments can act to ensure that price signals are consistent with policy objectives, for instance by ensuring a floor price for energy which ensures that new technologies are profitable even if prices temporarily crash.
It should be a no-brainer, but given that it's (evil) government intervention, it seems to happen increasingly rarely. In the long run, we're all dead. John Maynard Keynes
The French are happy with EDF's decision. The Brits could have made other decisions than to rely heavily on cheap gas from the Continent or cheap electricity from France that were not locked in/guaranteed supply.
Short term gain, longer term pain.
