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The Price of Power: Reforming the Electricity Market

February 22, 2017
By British House of Lords

Efforts to decarbonize the U.K.'s energy supply are undermining and, with present technologies, conflict with the prime goal of ensuring reliable, affordable energy.

The House of Lords has determined the long-standing objectives of energy policy, to ensure a secure and affordable supply of power, is being undermined by a recently imposed third objective—the decarbonization of the power supply. It is clear, electricity generated by fossil fuels is cheaper than renewable sources and government efforts to reduce carbon emissions, have imposed high costs on consumers. For instance, the average domestic electricity bill was 58 per cent higher in 2016 than it was in 2003 and industrial electricity prices in Britain today are higher than anywhere else in Europe. More importantly, renewable sources of energy do not deliver a consistent supply of electricity, with their availability varying with weather conditions. As a result, as dependence on them has grown, so has the need for, costly, reliable back-up generation to ensure that the lights do not go out. The House of Lords believes security of supply must be the predominant consideration in energy and as such, decarbonization policies must be slowed down.