Plaid Cymru MP says cost-of-living crisis shows failure of energy privatisation
Plaid Cymru’s Treasury spokesperson, Ben Lake MP, says the UK’s current cost-of-living crisis shows the failure of energy privatisation and called for a discussion on the state’s role in the distribution of energy and electricity
Speaking on BBC Wales’ Sunday Supplement programme, Mr Lake pointed out that wholesale gas prices in the UK are at the lowest level for nearly 18 months, yet the UK market is struggling to benefit from those lower prices.
“If you also look at some of the wholesale gas prices at the moment, you see a situation whereby the European price for gas per therm is significantly higher than the UK wholesale market,” he said.
“Because of the increased supplies of liquid nitrogen gas and shale gas from America to the UK and the fact that the UK has more ports that can receive this gas, the UK domestic current market price for gas is about a 10th of the European one – it’s significantly lower.
“But the UK market is quite sluggish and inflexible to benefit from these lower prices.”
“One of the reasons is that you do have a privatised network and energy companies which ultimately exist to make a profit,” Mr Lake added.
“When you look to other countries in Europe and indeed in America, where publicly owned or state-owned companies are playing more significant roles in the market, they are then able to take advantage of these prices and to limit price rises.”
“The discussion we need to have as a country is what role does the state and the public sector play when it comes to the generation and distribution of energy and electricity.”
Highlighting the situation in those other countries, Mr Lake said: “France is often spoken about with EDF. EDF is 85% owned by the French state, which is able to impose price caps of around 4%.
“How do they do that? It means that EDF’s profits plummet, but their persuasive argument is that they are able to make profits when the sun is shining, and then when it’s starting to rain, they’re the ones who have to ensure they’ve amassed enough of a financial cushion to sustain themselves through the darker times.
“There are similar experiences in parts of Germany, and many states of the United States following the disaster that was privatisation in California.”
Support our Nation today
For the price of a cup of coffee a month you can help us create an independent, not-for-profit, national news service for the people of Wales, by the people of Wales.