Is cheap energy a threat?

[marchesarosa]

Is cheap energy a threat? A threat to what?

[principled]

I think we could best answer this question by asking the opposite question. Is expensive energy a threat? And if so to what?

The answer has to be yes. Expensive energy is discriminatory as it disproportionately affects the poorest in society in terms of their own comfort (lighting and heating), it makes the goods they purchase much more expensive as a % of their disposable income (whether that be food or other consumables), it means that their wages will be squeezed in order to ensure the goods they produce (made more expensive by energy costs) remain competitive.
This effect is global and not confined to just developed nations.

Of course, there are those who say that expensive energy is the only way to reduce energy consumption. This is a sledgehammer to crack a nut. Firstly, it assumes that industry is lazy and never looks at reducing costs from whatever area. Secondly, it assumes that we overheat our homes and leave lights burning and so consume more energy that we should. If , for one moment we accept that the above is true, then there are ways of dealing with the issue.
1) Legislation to provide a stick and a carrot so industry and commerce increase efficiency and reduce energy consumption both when they produce a product and also for the energy used by the product they produce.
2) Provide energy to individuals at a lower fixed price to a certain ceiling and then have a taxed, higher price energy beyond that point (the opposite is the case at present), whilst providing resources to the poor to help them reduce their energy consumption. The various formulae necessary would be complex, but IMO would be fairer than slapping an 18% increase on gas/electricity prices on everyone, rich and poor alike.
P

[jonjel]

I absolutely agree Principled. It is the height of madness that you and I pay a fixed sum for x units of gas, then a lower sum for x+ units, as do industry.

And it is also the height of madness that there are apprently over 400 energy 'suppliers' but only about 6 real providers. People chop and change, well some of them do, and are buying the same gas from the same provider, albeit with a different name on the letterhead.

Someone should take a grip on this.

[StuartG]

Perhaps this helps to make the point, Jonjel...

"UK energy firms told to drop 'Del Boy' sales tactics"

"British energy firms should stop using "Del Boy"-style sales tricks and pay compensation to customers who were mis-sold gas and electricity contracts, a group of MPs has said.

Members of the Energy and Climate Change select committee said they feared customers were being confused by the array of complex energy tariffs pitched by doorstep salesmen.

The MPs expressed concern that these customers were being pushed into contracts with different suppliers no better or even worse than their current one.

Energy watchdog Ofgem estimates 40% of people who switch do not get a better deal."

uk.news.yahoo.com/energy-firms-told-drop-del-boy-sales-tactics-113630258.html

StuartG

[principled]

Stu
You are right about "Del boy" tactics. My concern is for those who don't understand p/kWhr, rebates, pricing structures, tie-in clauses and often paying for services they don't need or understand etc. all deliberately made opaque by sales jargon. In many cases the customers being fooled are old and maybe confused, and born at a time when one could believe what one was told.

Sadly, our "free market" seems to have spawned a marketing culture of obfuscation of price across all sectors. The budget airlines who add additional charges as you go through the booking process, supermarkets who are always "rolling back " prices and yet food costs are always rising, energy companies with complex pricing structures that you need an excel spreadsheet to work out. It's a sad indictment of our modern morality.
I am glad that I was fortunate enough to be able to live my life without having to resort to such "Del boy" tactics. I know that many others will not be so fortunate.
P

[jonjel]

I had a flyer in with my gas bill a week or so back. It offered me a guarantee of no price rises for two years. That was AFTER they had bunged the price up by I think 18%. and it would have cost me a 5% premium. I am going from memory because I binned it.

I saw on the news that 70% of new sales from one of the energy giants (British Gas I think) came from doorstop selling. I doubt all doorstop salesmen are 100% honest. They must be on commission so one assumes they will hide the bad and highlight the good.

And I reckon I can easily save the 5% by being a bit more careful on the heating. However I am pretty careful now and hate living in an overhot house.