The story being peddled by Keir Starmer’s UK Labor government is that rising household electricity bills are a result of a climb in the wholesale price of natural gas due to a constriction of Russian natural gas. That narrative worked fine in 2022 and 2023 to placate ratepayers when wholesale gas prices were high, but it is wearing thin now that the wholesale price of natural gas has fallen. What has been rising steadily since 2015 is the amount of network costs, green generation subsidies, and tax that gets added to household electricity bills (see graph below).
Image created by author with data from electricitybills.uk
Currently, UK residents pay some of the highest prices for electricity in the world, and if the current trend continues, it will rise even further. The Labor government’s slavish devotion to net zero accounts for the rise. Moreover, the UK has employed offshore wind generation to a much greater degree than other countries, and it is expensive, over three times more expensive than onshore wind to build (EIA estimate: 6,000 USD/kW vs. 1,700 USD/kW). The government is trying to avoid further defacing the English landscape with solar panels and wind turbines, so it’s relying more heavily on offshore wind. However, all of this could be avoided if the government gave up on its net zero ambitions. With Nigel Farage’s Reform party leading in the polls, it is looking more likely that there will be a course correction after the next election.
The UK is rich in coal and natural gas. After all, it was because of this bounty that the industrial revolution got its start there. It is the refusal on the part of both Conservative and Labor parties to frack for gas or mine for coal that has made energy prices the highest in the developed world.
England has a history of shooting itself in the foot. Due to a confluence of fortunate factors, the industrial revolution got its start in England in 1800. However, by 1900, England had fallen in the ranks of industrialized countries, due primarily to a rise in militant trade unionism that hobbled its entrepreneurial spirit. It took the will of Margaret Thatcher to break the unions and the Labor Party’s hold on the economy. Unfortunately, in her zeal to rein in the coal miner union’s power she inadvertently planted the seeds of the global-warming hoax, which was to plague the UK to the present day.
Nigel Farage’s Reform party should change all that, bringing down electricity prices and improving England’s competitiveness in the world. Nigel and his Reform party should have the same success in England that Trump and MAGA have had in the U.S. in setting the Green Blob back on its heels.
Image generated by ChatGPT.