COMMENT As if Britain needed any more bad news. Last Friday, Ofgem, the country’s energy regulator, warned that investment of up to £200bn would be needed over the next 10 to 15 years to maintain reliable energy supplies in the UK while cutting carbon emissions. Consumers hoping the recent slump in gas prices would translate into a lasting drop in energy bills will be deeply disappointed.
One of Ofgem’s observations, in particular, is striking: “It is prudent to examine whether we can rely on the risk management actions of individual market participants to deliver wider objectives on security of energy supply.” Regulation must give a far stronger lead than in recent years, providing the oversight that the market requires, but also the predictability businesses crave in order to encourage investment.
