Is UK Energy Too Cheap?

by Susan B. Media

A recent study by academics at Newcastle University argues that 'The current pricing model does not accurately reflect the high economic and environmental cost of generating, storing and distributing energy … This is unsustainable.'

The study challenges the government’s current approach to energy security, arguing that the UK requires a ‘systems architect’ to manage energy security. The study also stated that energy is too cheap for the majority of the population, which results in wasted energy.

Professor Phil Taylor, who leads the Institute for Research on Sustainability at Newcastle University has said: "The current pricing model does not accurately reflect the high economic and environmental cost of generating, storing and distributing energy. In fact, because of the way energy is sold today, it becomes cheaper the more we use. This is unsustainable.

"Although we must make sure people can afford to heat their homes, for the majority of us energy is actually too cheap – this is why we leave lights on, keep appliances running and use machines at peak times when energy costs more."

The Labour Party has said already that it thinks an energy security board is required. One politician has directly agreed with Professor Taylor in that nobody is really in charge of the country’s policy for energy.

The academics have encouraged politicians to work with those in the energy industry in order to change the way we price energy. They feel that energy providers should be given incentives or rewards for helping customers to use energy in a cost-effective and efficient way. The study shows that the academics feel too much debate focuses on reducing emissions rather than other important issues such as water wastage.

"This thinking risks locking the UK into a future in which water availability could put energy security at risk, and power stations could be forced to reduce production or even shut down if there isn't sufficient water available to keep them safely operational."

Academics may suggest that energy is too cheap, but many homeowners in the UK would disagree – considering the recent rise in energy bills. Energy wastage is a big problem, and simple changes both at home and work can make significant savings. Switching from a gas central heating system to a heating oil system, for example, will save money on energy bills.

Studies of this nature are becoming popular in the energy industry, putting real pressure on the government to address the issues within the industry.