story I did last month about “Cost Deferral Mechanism” loans meant to smooth energy bills, that we appear to be getting, pointing to the delicate politics of spreading the oil price shock over a few years… bbc.co.uk/news/business-…
Video from last nights #BBCNewsSix explaining the price pressures imported into UK at “Energy Island” the Isle of Grain, where massive tankers of liquefied gas were arriving. A record number came to the UK in January, mainly from the USA:
Going through some of the factors going into the Ofgem energy price cap rise, and the Government’s options to mitigate with a bar chart, which the geniuses at BBC graphics matched to my bar scarf…
LNG tanker from US guided into the Medway, part of the record flotilla coming in to unload much fracked gas, and therefore imported inflation into our pipelines… and on to bills. 
This as far as I can see is the only public exposition of the smoothing/ loan plan - from backbench Conservative MP @SMcpartland which suggests that loans would have to be £25bn not the £6bn speculated about today… politicshome.com/thehouse/artic…
plan suggested would smooth entire rise in the cap over 10 years - so £700 would become £70 rise each year, with interest paid on state guaranteed loans…
would mean interest of £5-6bn, assuming 4-5% interest, but you could see over that timeframe it might still be +ve value…
would mean interest of £5-6bn, assuming 4-5% interest, but you could see over that timeframe it might still be +ve value…
Structurally, could build on tweaked version of supplier of last resort system, or one of the Contract for difference schemes (though BEIS Sec seemed to rule that out)… one idea floating around is to reheat the CLBILs pandemic loans from BoE…
Struck me as unlikely to be justified in monetary policy terms, but there appears to be some coordination in the timing of the Ofgem/ Treasury announcements with the Bank of England’s interest rate decision/ new forecast - so something worth watching tomorrow
Lastly - Treasury kept this very very tight. Can see in papers that none have been briefed, industry kept in dark.
Maybe a political upside in terms of credit, but given so many moving parts on how many people get help, risk it lands flatly with firms expected to enact it
Maybe a political upside in terms of credit, but given so many moving parts on how many people get help, risk it lands flatly with firms expected to enact it
And when billions are spent today to help with bills… some of that money will be subsidising the warming of air that immediately escapes houses, because installation rates of insulation have fallen, with proportion of stock insulated stalling over last 5/6 years
Can’t find like for like international comparisons on these rates - but one climate tech company Tado produced this data from its own home sensors:
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