How much should we pay to keep the lights on at home?

Wind energy needs investment.

Wind energy needs investment. - Credit: Archant

The supply of energy – mainly electricity – doesn’t ever seem to have been so near the top of the political agenda as it is today.

Whether it’s the cost of our power, the reliability of the network even when there is a powerful storm, the provision we should make for “green energy”, or the ability to produce enough electricity to meet demand, there is much to debate about the power we use.

There is a clear need for us to look ahead to the future of our energy supplies and needs. For that reason it is right that companies are compelled to look at alternative energy streams – we cannot just go on building more and more power stations that burn fossil fuel.

At present the cheapest way of generating power is to put more coal, oil, and gas into ageing power stations and pushing more carbon into the atmosphere.

However, there is only a finite amount of coal, oil and gas to be burnt – and the consequences of pushing all that carbon into the atmosphere could have catastrophic consequences for our grandchildren and great grandchildren.


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For those reasons it is right that there should be subsidies for cleaner forms of electricity generation – however there does need to be a debate about where these subsidies should come from.

The answer to rising electricity bills should not be to reduce the subsidy paid for green fuel, it should be to look at whether it would be better for that subsidy to come from general taxation.

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Of course we then get into a very difficult argument. The fairest form of taxation is income tax.

Those who have a high income and can afford to, pay more. The pensioners struggling to keep warm and worrying about their electricity bills pay less (if anything at all).

But of course income tax is the least popular form of taxation of all – especially among politicians.

Politicians are all convinced that anyone in work will riot at the very whiff of an income tax rise, but that’s another issue!

There has also been criticism of the decision of the government to guarantee a payment to the operators of the next nuclear power plant at Hinkley B – because the figure is much higher that the current unit price.

This is a tough one. Given the long lead-in time and the huge investment needed to build a nuclear plant, it is not unreasonable for the operators to need a guarantee that their investment in protecting our power needs will earn them a reasonable sum.

And, of course, who knows what the market price of power will be when it starts operating?

On the other hand, the deal does look like bad news for the consumers of the future – if prices do not rise substantially in the meantime.

But then it would be far worse if the consumers of the future faced the threat of regular power cuts simply because there was not enough capacity in the system.

The gadgets we use may have become much more efficient over the years – but the fact is we are more reliant on electricity than ever before.

And for most people the most important thing is, and will continue to be, the knowledge that there is a constant supply of juice to keep the lights on.

We might not like the prices we have to pay – but power is a basic need for all of us.

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