Centrica and EDF, the duo behind the UK’s current fleet of nuclear power stations, have read the political breezes, sensed the popular mood and come to the correct conclusion: they’re up for a negotiation with government to cap the price of electricity.
So they should be, of course. Even if the size of windfall profits being collected by generators is currently unclear, nobody doubts the fact of outsized returns when current forward-selling contracts fall away. The wholesale price of electricity, absurdly, is tied to the price of gas, creating nonsensical outcomes in those corners of the generation market where input prices are virtually unchanged.
