Energy
Energy Price Decoupling
Upfront
+£800m
Annual
-£18.0bn
Revenue
+£3.0bn
Net Annual Effect
-£15.0bn/year
Payback in 1 years
GDP +1.2%Productivity +0.4%medium uncertainty
3 sources
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Energy
Energy System
Grid Queue
739 GW waiting
Connection Time
10-14 years
Bill Cap
£1,755/year
42%Current
Potential: 85%
✗Key Problems
- 1.Grid queue 4x planned 2050 capacity
- 2.Gas sets prices 97% of the time
- 3.Industrial electricity 89% above EU median
- 4.£1.5bn constraint costs (£12.7bn by 2030)
✓Solutions
- 1.SPLIT MARKET PRICING: Decouple renewables from gas (Spain/Portugal model)
- 2.DOMESTIC GAS EXPLORATION: Consider lifting fracking ban (US shale precedent)
- 3.NUCLEAR FAST-TRACK: Standardised design programme (France/Korea model)
- 4.GREEN LEVY REFORM: Move levies to general taxation (Germany proposal)
Analysis
Root Causes
1
Grid queue 4x planned 2050 capacity
2
Gas sets prices 97% of the time
3
Industrial electricity 89% above EU median
4
£1.5bn constraint costs (£12.7bn by 2030)
Reform Pathway
1
SPLIT MARKET PRICING: Decouple renewables from gas (Spain/Portugal model)
2
DOMESTIC GAS EXPLORATION: Consider lifting fracking ban (US shale precedent)
3
NUCLEAR FAST-TRACK: Standardised design programme (France/Korea model)
4
GREEN LEVY REFORM: Move levies to general taxation (Germany proposal)
Cascade Effects
Reforms in Energy System will have downstream effects on 5 connected domains:
Policy Costings
Rigorous fiscal analysis of Energy System reforms
