There will be no new windfall taxes on energy firms to help fund the £100bn-plus household and business rescue package, the prime minister has said – a predictable answer given her past statements. But what about the obvious alternative: a cap on the price of electricity that is generated by firms whose costs are unaffected by soaring gas prices?
Not every nuclear, wind and solar project is currently making fat and unexpected profits, but many are thanks to an outdated system that ties their revenues to the marginal price of wholesale gas. A decoupling of gas and electricity prices is desperately needed – and the process can’t wait until the completion of the current leisurely official review.
