UK energy 'is badly regulated and taxed too highly' Users launch a wide-ranging attack on the Gover...
 
Jul 14, 2005 - Daily Telegraph London
Author(s): Andrew Cave

 

BRITAIN'S most intensive users of energy have blasted the Government for a lack of transparency in gas and electricity markets, ineffective regulation and high taxation.

 

The damning verdict was delivered by respondents to the Business Energy Index, a new twice-yearly survey compiled by npower.

 

Asked about the key policy issues that would impact most on their energy costs over the next one to two years, major energy users also cited high energy prices and the structure of the markets.

 

In addition, they called for the Government to change its stance on nuclear energy.

 

The survey comes after the publication of a report by consultants Global Insight which cleared the UK gas market of price distortions and pinned the blame for soaring prices on Europe's failure to open up its markets.

 

It said British industry paid pounds 1billion more for gas than its Continental rivals last year because of the difference between the nation's competitive marketplace and the situation in Europe where much of the industry is controlled by state-owned monopolies.

 

While Britain has been self-sufficient in North Sea gas during recent years, the supply is fast diminishing and when demand for gas is high during cold weather it must be imported via cross-Channel pipelines.

 

Global Insight said state-owned companies on the continent were selling to the UK at high prices because their Governments want to keep supplies for domestic use.

 

Earlier this year, the Energy Intensive Users Group, which represents industries such as chemicals and steel, also blamed the failure of the European energy market to open up to full competition, saying British companies were being forced to pay an extra pounds 700m a year for their gas and electricity.

 

However, Andrew Bainbridge, director general of the major Energy Users' Council, said: "Everyone has their point of view. I suppose there is some disagreement about what the problem is.

 

"What there is no disagreement about is that the prices for energy in the UK are higher than they are in Europe.''

 

The npower survey showed that one in five of respondents had taken no steps to improve energy efficiency over the last six months.

 

The most common reasons cited were cost and technical implications.

 

Nearly four in five of the 60 major energy users, 30 small to medium-sized enterprises and 10 policymakers and lobby groups in the survey said the Government should be doing more to encourage technical innovation.

 

Some 42pc wanted the Government to introduce specific financial incentives to improve energy efficiency and provide more relevant information.

 

Only 13pc wanted more regulation introduced.

 

Nearly one in five of the major energy users surveyed said they either did not support the Government's target for reducing carbon dioxide emissions or did not know what they felt about it.

 

Mr Bainbridge believes management complacency is a major factor in preventing British companies from taking action to improve energy efficiency.

 

"I have always felt that complacency in the boardroom is a major factor,'' he said. "British boardrooms are traditionally not interested in energy efficiency.

 

"It is very, very rarely on the agenda. It only gets on the agenda when there is a crisis.''

 

 


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