Argentina Abandons Energy Price Cap as Britain Imposes One

The government is moving closer to imposing a new energy price cap meant to benefit middle income households (a price cap for low income households already exists). The Domestic Gas and Electricity (Tariff Cap) Bill is likely to be made law this summer. A new cap could be in operation by this winter. The law will require Ofgem to impose the cap on standard variable tariffs which will affect about 11 million contracts. The government claims the cap will save households up to £100 a year (or £8 a month)…

Last month Argentina’s government, led by a centre-right party, abandoned energy price caps, deeming the policy to have failed. Argentina deployed heavy state subsidies in electricity markets and set prices for consumers; as a result investment in the energy industry plummeted, the country lost its energy independence and power outages became frequent. Excitable investment notes are circulating in the City praising competition-focused free market energy reforms in that country and others. In the UK, the Competition and Markets Authority undertook a two year study and concluded it would advise government against price capping, which squeezes out smaller suppliers who require flexibility on price, entrenches the position of the big six and acts as a disincentive for consumers to switch suppliers so as to find the best company for them. That Tory manifesto opposition to  ‘untrammeled free markets’ in action…

mdi-timer 4th April 2018 @ 2:25 pm 4th Apr 2018 @ 2:25 pm mdi-comment Comments
Tory Ex-Minister is Working for Oligarch Named as Corrupt by Russian Opposition Leader

Former Tory MP and tree-hugging Energy & Climate Change minister Greg Barker has had a difficult start to 2018. As we previously reported in November, Russophile Lord Barker of Battle’s primary role as chairman of En+ Group was to add a veneer of respectability to reassure the City as the Russian energy and aluminium producer listed on the London Stock Exchange. Once the LSE accepted the listing, Barker must have thought his main struggles were over…

Slightly concerning then that Barker’s boss, Oleg Deripaska, is now under the cosh on several fronts. At the end of January Deripaska was named on the US Treasury list of oligarchs linked to the Russian government. Deripaska owns over 70% of En+ and is also the subject of a letter to the SFO from the Russian opposition leader Alexei Navalny, calling for an anti-corruption investigation into his affairs after he was filmed on a yacht with Sergei Prikhodko, Russia’s deputy PM. The yacht trip only added to the intrigue around Deripaska’s links to Manafort and the Trump campaign, especially with new allegations of more meetings on the US elections surfacing…

This is likely not M’lud Barker’s biggest headache. Both MI6 and officials in Washington are angry that the float went ahead, as most of the funds raised went straight to the state-owned Russian bank VTB, which is under both EU and US sanctions. Having secured a bridgehead on the LSE, En+ is rumoured to be gearing up to raise another $1 billion from investors. While happy for its oligarchs to raise money in London, Russia seems less pleased about the presence of ex-KGB officials in Salisbury. Barker, a close pal of ex-PM David Cameron, must be wondering how to salvage this one…

mdi-timer 7th March 2018 @ 6:46 pm 7th Mar 2018 @ 6:46 pm mdi-comment Comments
From Husky Hugging to Coal Mining

Greg Barker, now m’Lord Barker of Battle, Cameron’s husky hugging companion and former swivel-eyed Energy & Climate Change minister, has found a use for his experience gained in Government. Long a fan of Russian billionaires, Barker is the newly-appointed chairman of EN+, a Russian energy and aluminium conglomerate controlled by oligarch Oleg Deripaska. Barker’s first job is to bring a veneer of respectability to the energy company as it floats on the LSE. He’ll have his work cut out…

EN+’s owner is certainly close to the Kremlin: wikileaked US diplomatic cables described Deripaska as one of “the two or three oligarchs Putin turns to on a regular basis”, while the US still refuses to give him a visa due to his links to organised crimeDeripaska’s dealings with Manafort won’t help his cause…

More troubling are EN+’s ties to VTB Bank, the Russian lender that has been sanctioned by the US and EU since the Russian invasion of Ukraine and annexation of Crimea in 2014. As the Spectator pointed out:

EN+ says it intends to use the ‘primary proceeds’ of the share offering ‘to repay a portion of its debt’ – which is owed largely to Russian banks such as VTB (also an EN+ shareholder) that helped bail out Deripaska’s businesses with Kremlin support after the 2008 crash, and are currently subject to US and EU sanctions. So London investors’ money will be flowing back into Putin’s other-wise ostracised banking system. 

With sanctions still in place on VTB and Russia, Barker has to convince investors that this deal does not violate sanctions. He’ll have an even harder time explaining to Cameron why he’s working around sanctions his own government helped put in place…

Aside from all that, take a moment to reflect on the sheer cynicism of a husky hugging Climate Change hyping minister becoming Chairman of a coal-mining to aluminum smelting conglomerate. One Tory grandee told Guido that Barker “must be short of cash.” 

mdi-timer 10th November 2017 @ 12:08 pm 10th Nov 2017 @ 12:08 pm mdi-comment Comments
£10,800 Green Levy on Every Household

Gordon Brown, Ed Miliband, Ed Davey and Philip Hammond all claimed levies on energy bills to fund renewables would eventually bring down costs for ordinary households. Eight years on from the passage of the Climate Change Act – the world’s toughest decarbonisation law – a damning report from the GWPF reveals the levies are having exactly the opposite effect: the switch to green sources will mean a £319 billion cost to the economy by 2030. That’s over three times the annual NHS England budget and will be passed onto consumers…

Peter Lilley’s Cost Of The Climate Change Act sets the figure in household terms:

“These costs place a cumulative £10,800 burden on each household, between 2014 and 2030. This is money that could be spent on families’ own priorities, and in more efficient sectors of the economy.”

The report also exposes the Act’s demanding emissions targets as unworkable. The law imposed cuts of 35% from the 1990 level by 2020, and 80% by 2050. But these are structurally impossible as total energy output will have to triple in order to meet them, and even then the power for millions of electric cars and green homes will have to come almost entirely from renewable sources. Conclusive evidence the Act was hot air…

mdi-timer 12th December 2016 @ 2:18 pm 12th Dec 2016 @ 2:18 pm mdi-comment Comments
Campaign Report: 22 Days to Go

oil rig

Leave message: Government would axe fuel VAT post-Brexit.

Remain message: Lord Sugar says Remain’s better for business.

Cut through: Fuel VAT cut post-Brexit.

Leave social media count: 434,209 likes, 48,062 followers.

Remain social media count: 440,282 likes, 31,838 followers.

Odds: Remain 1/3, Leave 3/1

Latest poll: Remain 44%, Leave 47% (ICM, phone). Poll of Polls is now Remain 52%, Leave 49%.

mdi-timer 31st May 2016 @ 6:01 pm 31st May 2016 @ 6:01 pm mdi-comment Comments
Amber Warning: Rudd’s Russia Dud

Osborne ally Amber Rudd is increasingly used as a telly spokesman on energy and Europe – she should know her stuff since her brother is Remain spinmeister Roland. Though speaking to Justin Webb on the Today Programme, Amber did Remain no favours:

JW: “Why is Vladimir Putin still a problem for us if we leave the EU?”

AR: “Because Russia exports a lot of gas to the rest of Europe, we access our gas through Europe and by 2030-“

JW: “Through Norway, most of it”

AR: “Yes, well Norway is in Europe…”

JW: “But it’s outside the European Union”

AR: “But inside the internal energy market…”

The UK is 49.5% sufficient in natural gas with Norway supplying 55% of imported gas. Russia of course provides a nominal proportion of UK energy…

Rudd went on to claim Brexit would cause a “massive electric shock” and then weaponised the spectre of Fukushima:

“The thing about the gas market is you don’t know what shocks and what changes there can be to it. In Japan, after the Fukushima incident the LNG market for gas went through the roof, because all had to go to Japan. You don’t know what shocks there are…”

Remain weaponises a second human tragedy in as many days…

mdi-timer 24th March 2016 @ 11:32 am 24th Mar 2016 @ 11:32 am mdi-comment Comments
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