Why are UK energy costs so high? And how to bring them down

[Music] Hello and welcome to Independent Thinking, the podcast from Chatham House. I'm Bronwyn Maddox. This week partly because of the short week in those countries where the coming weekend is an Easter holiday, we're doing something a bit different. I wanted to take the chance to dig more deeply into a question that flickers through many of our discussions. Why the UK's energy costs are so high and what the government should do, particularly if it wants secure energy, security of supply that is and to be green as well. The famous trio of goals, security, price, greenery of every government's energy policy. Those are questions affecting every household and business in the country during Iran crisis and they're certainly on the mind of the Prime Minister. There is a lot of controversy as you can hear every day. Is Ed Milband right to push for Ned Zero? Government policy is driving industry from the UK. Should we drill for more oil and gas in the North Sea? Should government pay to shield households from the spike that we're seeing in gas, petrol, electricity prices? The causes of the problem do go back a long way. The answers are not simple but there are answers, at least according to Cedita Helm, Professor of Economic Policy at Oxford University, who's been advising governments and writing on energy water in the environment for decades. So here I'm going to take the chance to have a conversation just on this subject to see if we can shed some light on it for those who are puzzled. Dita, welcome. Thank you for having me on the podcast. It's very good to have you. Let's start with a question of cost. Why is UK energy so expensive? In order to understand this, one has to go to the status currency before the Iran attacks. And we were just a few weeks ago already about the most expensive energy prices for industry in the industrialised world. And for households, we're pretty high. There is some leeway there but one of the reasons why it tilted that way is because after privatisation in the mid-1980s and into 1990. 40 years ago. 40 years ago we applied the same prices to energy suppliers as to large industrial customers. There were no special deals for industrial customers. And so there was a benefit to domestic customers because industry was not getting let off some of the costs as it had done for decades before. So we started off with very very high prices which got nothing to do with the Iran War. They were already a serious problem and indeed on the industrial side a crisis because quite a lot of energy intensive industry has been collapsing and remarkably fast too. You're talking for a start about causes that go back to privatisation and you're talking about industries being driven out of the UK saying where they need an awful lot of energy, things like steel or chemicals or so on. Yes. So some of the issues we have today do indeed go back to privatisation and the abandoning of any industrial policy was respect to energy pricing. But just to put this in perspective we don't have a great deal of manufacturing industry left. We have been de-industrialising for quite a long time. Indeed that's one of the reasons why emissions have been falling. You know, close the business down, import it from elsewhere, the emissions don't count and then your numbers look better. But just in recent months, year or so we've lost Grangemouth, our largest refinery. It could be an import terminal instead. We've lost another refinery in Scotland. We've lost one in Hull. We basically close down most of the steel industry will have to nationalise what's left. We've lost nearly all the fertiliser industry. We've lost the fiberglass industry and the car industries fall back to the production levels of about early 1950s. These are just some of the things that have been hitting us hard because we have these incredibly high industrial energy prices. And the problem for the domestic consumer is the following. You know, if Grangemouth exists it will pay its cost for its generation of electricity going to the plant and other fuel supplies and it will make some contribution to the system costs. But the system costs the networks, the transmission lines, distribution lines etc. These don't disappear when an industrial company closes. On the contrary, those costs remain but there's only the domestic customers to pay for them now. And so therefore the domestic customs looms if we don't price into industry to keep them on the system so they make some contribution to the cost. And that's another reason why domestic customers are, I've got further pain to come. Let's go on to two of the other points. The two other aspects of any energy policy, whether the supply is secure and whether it is green or clean. How is the UK doing in these? On the issue of security, I mean basically from about 1980 onwards, the UK had the luxury of abundant North Sea oil and gas and it had pretty good coal supplies back then too. So what it was able to do was close the coal industry, switch to gas and rely on gas in our home market. So we could have a just in time gas supply world in which effectively the gas was landed in the UK and the gas fields could be flexed to provide essentially storage in live wells in the North Sea. And as that position wound down now deliberately as an act of policy and as we got out of coal at the same time, we made ourselves extraordinary exposed to gas, which is 35% of our total energy burn. No coal to fall back on like the other Europeans and we had developed a just in time system and we had nothing which was just in case, for example, no other storage. And we had to buy at the spot price on the global market and hey presto, when that turns out to be a LNG cargo on the high seas from US, why do we get hit really hard in pricing terms? For example, when there is a war on and I like the way you describe North Sea oil wells or gas wells, if you like, as storage that we were using if you like a storage that they were very much on tap. You haven't used the word nuclear yet. Where does that fit in? Well, beginning of the 1980s, the UK was going to pursue a policy similar to France and I think in 8081 David Howell of then Secretary of State went to House of Commons and announced we built 10 nuclear actors, PWRs, one per year for a decade. And we build a really substantive nuclear fleet of PWRs and off we would go and we'd have not France's position whereby it's overwhelming in nuclear for its electricity, but we'd have a big hall of nuclear power stations. Well in the event we built one group size well B and then eventually we started building Hinkley but basically closed everything else. So the UK doesn't have coal, Germany, Italy, lots of other countries have coal, it doesn't have much nuclear left France and residual is gas and well, well and that's it. And then all the alternative is renewables and the thing about the renewables and this is the green side of your question. The amount of green renewables is that they're intermittent. So most of the time or almost most of the time they don't generate. Just to emphasise that point, you're seeing most of the time they don't generate because one of the points obviously we want to come on to is that the UK has a vast amount of renewables compared to what it used to. That's wind and some solar covering a lot of the country and it's capable of producing a lot at its best isn't it? It's capable of producing a lot when the wind blows and when the sun shines. So we have a very good place for wind which is the North Sea, 40% of the time it works and 60% of time it doesn't. Solar is different, we're in northern latitude and it doesn't shine very much in winter. It shines a lot in summer. Now the thing is that most technologies and it will be absolutely true for the data centres, the AI and the new industries and the future. Don't want intermittent power, they want firm power, they want power 24/7 really reliable otherwise your banking system everything collapses and so the question is what's going to provide that firm power, what's the backup? Now when people say we've got loads of renewables, yeah it's great, particularly the offshore wind but it isn't necessarily going to translate itself into lower prices or more secure supplies and in fact quite the country. So let me just give you a few numbers. So in the bad old days, free renewables, we had a peak demand on the system so that's when everyone turns the lights on and they're boiling the kettle and all that kind of industries, about 45 gigawatts and we had about 60 gigawatts of capacity to make sure we had a bit more just in case and then it goes wrong or the surge in power or you know power station drops off. That was enough to look after the country even a peak time. We had one grid and we had no batteries, none of the we had one pound storage but not really much storage okay and the system operated as a reasonably competitive price. Already today because the renewables are intermittent, we have 120 gigawatts of capacity to meet an actually slightly lower peak demand but let's call it 45 still. So we've got twice as much as we used to have to meet what is actually slightly less. Yes but it's worse than that we're going to have to double the grid for the same output because these wind farms and solar things etc. On the peripheral systems. Now peripheral systems sounds like jargon for Scotland. I mean they've been built in windy places or off shore. Off the shore. So I mean nobody nobody in an economic framework would ever have built any off shore in Scotland but that's another matter because with the cost of the transmission. So when you twice the grid. Because the grid the old grid was built to service say coal power stations that were right in the centre of the country near the big cities. Coal and nuclear mass production and some gas too. And some gas. But a lot of the grid was near the cities and now you're trying to bring power that is generated some of it. It's on around the North Sea. And nothing wrong with that at all but it's just you have to build a lot of infrastructure. So so far we've got twice the capacity for the same peak demand. And we've got twice the grid infrastructure. Now in addition to that we need all the batteries and storage that's being added because although the batteries and storage can't deal with the so-called nuclear flats as cold still win today. That is a marvelous German word for cold darkness isn't it? I mean if you know Germany where they thought solar power is such a great idea. You'll know how dark it can be a winter. But that's the side. So the batteries can't cover all the periods but they can do some and they can do the shoulder. So if you have a solar panel at home as I do with a battery you can stretch it into the evening after the sun's gone down a bit. Okay so you need to do that. Oh and then you need one more thing on top of that. On top of all that lot we're going to need 35 gigawatts of gas still in 230 if we meet net zero. But they'll only run about 4% at the time because they're only needed when the wind is implying the sun isn't shining after ramp up really quick. For these cold dark Germanic moments. So they're really expensive because running a gas station when you're not going to run very often don't know when it is and have a gas supply instantly available is expensive. All right so let me just sum up here we've got a lot of different elements of cost coming in. You've got a whole lot of new renewables which we have for built. Then you've got new grid to connect them up. Then you've got some more batteries. And then you've got the gas that you need anyway for the cold dark moment. So you've got all these things. Yeah. All right so we've added all these costs at once. The result is we can be a lot greener than we were as you said in the bad old days. We definitely can be but we've powered on all these costs. Why are we different from other countries in that mix? Well our only real rival is Germany. Which is nearly as expensive as us. But in the German case they still have the cold. So they're going to push the cold really hard but they got out of nuclear power stations. We just got a few left. So they're even weaker on nuclear. And why from a climate policy you close perfectly functioning and well regulated nuclear reactors. Good and sound you know this but there's politics to that of course. But basically they're pretty close behind us. Nobody else has tried to do this. If you're in Spain and you're on the south and you've got abundant solar resources that's not the weather in Newcastle. Right. Deita I just want to be absolutely clear when you say no one else has tried to do this apart from us in Germany in a sense. You mean go very green as a northern country. Yes. To be a clean energy superpower. Right to which as Boris Johnson said in an official document the leaders of China and Russia were looking to us to find out how to do it. The only thing they're looking to us to do is to find out how not to make your electricity the most expensive electricity around amongst the G7 etc. It has worked. Even in already it's sometimes as I've heard Boris Johnson quoted. So given that the UK has invested all this that you've just described. Are we stuck with it now? Yes. Yes. I mean you don't want to cut down the turbines. You've got them right and they do add something to the system. Right. And we are building a lot more grid and we will have that. So that's good. The issue is and you know in some sense it's just sort of what you might call economic common sense. You know if you were running an electricity system like most people are in the world which isn't paying for the cost of the pollution it's causing. Is it likely that you can move to a system which does incorporate the cost of the pollution you're causing. And you know wonder wonder it's also going to be cheaper and make you one of the cheap locations of the world where the industrial energy intensive future in the world are flocking to us to get near cheap offshore Scottish wind. This is such an interesting point you're making. So you're saying really if I've understood you rightly that we have got a much greener system and the cost of that are being passed on whether it's to industry or consumers but the rival systems if you like of energy the cost weren't all passed on. I'm thinking of things like well we still have the drags power station which runs on pellets and the cost of bringing those here isn't reflected in that and the cost of oil and coal wasn't the environmental cost wasn't reflected in the price but now we've got something where those costs are reflected in the price and then we're having to pay it. That's true. And you know dare I say we've made it worse by making the gas that we're actually reliant on to keep the system flowing more expensive than it otherwise would have been because we've got no just in case storage and we've got a complete exposure to the global gas price and so we're not like China which has a massive amount of coal to back up its renewables and a lot of nuclear. We're not like the United States which has buckets of cheap gas and loads of oil so much so that it doesn't even need any from the Gulf by the way and it's now the largest exporter of energy gas. We don't have those things we don't have the mix of power that other European countries have. We don't have a big bulk of nuclear like France. We don't have some coal still on the system. We have gone for a very what you might call skinny system in which it's just gas, oil and intermittent wind and solar. That's it and nobody had done I know of it yet worked out how to run a modern industrial firm power I continue as 24/7 power world in the future on just renewables. Because we're a long way away from batteries being able to do that job. And I struggle to see how nuclear plus renewables will do it unless you're going to do nuclear at the scale that France has and indeed proposes to carry on doing and I don't see any chance about happening and the reason for that which is worth bearing in mind too it's not just that we have the structure we have at the moment. What do you mean by the structure? The frame of renewables and other components of the energy mix. Energy mix, okay. It's not just we have the energy mix. The bits that we're trying to pursue are especially nuclear. We've managed to do it in the most expensive way in the world. I mean to give you an order of magnitude here. I mean Hinkley is costing 16 billion per gigawatt. That's not going to mean an awful lot. So people just tell us I don't know how many more times expensive it is to build a station here than in China for example. What we don't know exactly what it is in China but almost certainly quite a lot less. To give it your proportion okay. So supposing you said I don't care about climate change I'm just going to do gas. Right. What would a gigawatt of gas cost? Two billion less? If you look at the US where all these energy intensive industries are supposed to be suffering from being committed to these legacy fossil fuels are expensive and determining world markets. Right. I mean data centers are building out the demand for electricity and a phenomenal rate. There really is a technological change and industrialization going with it whether it's good or bad. Okay. What's supporting it? Cheat gas. Why are Patrick chemicals in the US not in Europe, not in the UK. Cheat gas and that creates this problem for us and it is for Europe. Where we're for or more times more expensive and energy terms. Just before we come on to what government should do I just want to ask on the at risk of getting technical which is we've talked about the mix and the rather expensive choices and expensive mix and narrow mix of energy that the UK has. What about the pricing, the sharing of that pricing? Who pays for it between industry users of electricity and general taxpayers? Do you think governments have got that right? What is it worse than the problem? Okay well three bits to it. There's what a taxpayers pay, what does domestic consumers pay and what does industry pay and the drives this privatization has been essentially to say taxpayers shouldn't pay anything. Okay now they are paying a bit now but basically to push all the levies all the policy costs etc. on to use the system and if you graphistically stretch government why wouldn't you do that? Okay now then the balance is between how much was put on to industry and how much was put on to domestic consumers and basically a large industrial complex you know things that we used to have like ICI and so on was treated after privatization as if it was a large energy supplier to you and me and so those cross-subsisties we supported industry and doing a number of countries around the world continue to do so aren't there and so industry gets hit as well as domestic customers. Now there are a few cutouts like exemptions from carbon and levies and a little bit of twist coming next year to take some of the system costs away from industry. But basically, we are not the country which has arguably even the capacity to burden taxpayers given the tax rights we have to simply kind of shift and manipulate these costs around. So let's go on to what government should do given you laid out those constraints pretty starkly. And governments want all those three things, as I said at the beginning, they want energy to be not too expensive. They are often certainly in the case of the UK government wanted to be green. This is an Ed Millibans drive for net zero and they want it to be secure. They don't want to be hostage to other countries turning off the tap. What should the UK government do now? Well, I like the words be realistic. Okay, I think we should be realistic about climate change. We should be realistic about security and we should be realistic about cost. The nice idea that you could, Tony Blair, set this out and then energy paper over 2000. We are feeling the ghosts of previous Prime Minister and energy policies passing by this conversation. What governments keep trotting out this stuff about being cheap, secure and green, as if it's possible to have all three and it's all going to be out and pies and all that kind of stuff. And we are going to be the clean energy super power of the world. Now, it's nonsense. There are real trade-offs to make here. There are real costs of going down the decarbonisation route when other countries aren't. Whether we like it or not because we're in a competitive world and our economy is open. So the first thing I think government should do, and it's least likely, is to be honest and face up to the public and the voters and tell them if you want to be green and fast than anyone else, it isn't going to be cheap. So this is a political choice. They might have said that and there's one that Ed Miliband has very clearly hitched himself to and said, we want to go down that route so you would say we'll then spill out the cost. Yes, exactly. And if we're going to be green, let's be honest about it and be clear that it's carbon consumption, not carbon production that matters. This is an important point, just take people into what that means. So the targets the UN framework sets out and we pursue are territorial carbon targets. So we measure how much carbon comes out of the power stations, the car exhausts, the factories, etc. Add all that up and say, is it going up or going down? Supervisually, that's seen perfectly sensible target to have except the best way of getting the target down quickly and actually once explained this to Boris Johnson, at length when he was crafting energy policy going back a bit, is why don't you just close down? Go ahead and import the stuff instead because your emissions territorial have go down, but your impact on climate change will go up because of course the stuff will be produced somewhere else and probably more polluting than it currently is. And then has to be brought here? Yes, so I mean the example that I actually set out was, you know, I said, well, you know, if you really want to be the poster child of the world and reducing territorial emissions, why don't you close Grangemouth? Why don't you close the steel industry and hope the car industry fails because of Brexit? Little did I know that all those three things would basically happen and the result is our emissions record is even better. What matters is what you and I consume. It doesn't matter where it's produced because climate change is global. It isn't oxford climate change and it isn't English climate change. It's global and so you should take into account imports as well as domestic production. Not kid yourself that if you're the fastest de-industrializing country in the developed world, we will necessarily the fastest reducer of your impact on climate change. Now we don't have Ed Millabound right here to respond to that, but I'm going to imagine, you know, I've heard quite a bit of what he has to say, that he'd say, well, look, I take a point, but still it's a very good step for Britain to become carbon net zero in what it produces and it's a good symbol and example to other countries. Well, there are two parts. First one is if the result is that you don't produce, you buy imports instead that are more polluting than what you did. It isn't a good idea, right? That's just a sort of doubt that one. But the fundamental point here is that if you really care about climate change, and I certainly do, then you want to focus on how to have the maximum impact on climate change. And the question is, where will you have that maximum impact? I'm trying to be a unilateral country that doesn't produce much carbon, doesn't mean your carbon footprint goes down. And if in the process you make your system less secure, and if the costs go up and your competitiveness goes down, that is not a very well designed policy. You can do better than that, and that doesn't say give up on climate change. Not at all. Does say square with the public and tell them it's going to cost them, but it also involves quite a lot of other policies at the same time, many of which are being avoided, or actually not avoided by accident, but deliberately inflicting more damage on your climate objective and on your security objective and raising bills. Not a good place to be. One of the other points of controversy is about drilling in the North Sea and the government said, "No new licenses," and then obviously the Iran war has happened and the conflict between Russia and Ukraine after its invasion of Ukraine continues. What would you say the implications of that decision are? Well, let's start. Gas is 35% of our total energy supply. It's big, okay? And we're going to go on burning gas for the next decade or two at least, and probably much beyond that, that's realism. So we're going to burn gas. Now the question is, what's the best way of securing those supplies in the least polluting way and at the lowest cost to consumers? That's a perfectly sensible structure to think of the problem, okay? So the first thing you'd say is, well, we don't want any LNG, because LNG is much more polluting than pipeline gas. Because of the transport or because of the where it's produced and how it's produced. So our source of LNG gas is not Qatar, it's the US. The US didn't export any LNG gas until 2016. It's now the world's largest. Now its exported gas, let's go from Mexico, is fracked gas. Fracked gas is worse than conventional pipeline well gas. By quite a lot methane, particularly being a problem. It's then compressed to get it into the LNG tanker, right? It's then sailed across the Atlantic, it's then docked, and then it's decompressed and put into the system. Now that means it's more expensive, but it's also significantly worse from a climate change point of view. So that's starting one. So you'd prefer to have pipeline gas. So the pipeline gas you're going to have, okay? The next problem is, so where do you want the pipeline gas to come from? Do you want to come from the North Sea or do you want it to come from the North Sea? I forgot to mention the Norwegian bit of the North Sea or the English bit of the North Sea. It's all the North Sea, right? 30% of the gas comes through one single pipeline from Norway, okay? We're trying to stop producing gas to take it from the Norwegian bit of the North Sea, that make a lot sense. Then you say, yeah, yeah, but our policy is to get out of gas, right? So you know, it's not where the gas comes from. It's we don't want any gas. Well, really? We'll stop burning it then. When people say like, just stop all, just stop gas, just stop using gas. And that's not going to happen anytime soon. And then they say, yeah, but the reason we want to get out of gas is because the prices are determined on the world market, and they're volatile and high and they're going to go ever higher. Well, actually, I think they're probably going to go lower after this event in Iran, quite substantially, but put that aside for a moment. We don't have to buy gas from our perception of the North Sea at the world price. We never used to, in the bad old days of British gas. We basically said, if you want to land gas from the British bit of the North Sea and you want license to it, you have to land it in the UK. And you have to sell it to British gas because British gas, the monopoly and British gas will sign long-term contracts with you at fixed prices. Now, why don't we have fixed price contracts? Why don't we say to these people applying for license in the North Sea? Tell you what, if you want a license to build this field, we want you to sign a long-term contract with us for that gas. So let me pick up this point, Dito, because it's a crucial point. You made it a lot in your writing about whether we could sign long-term contracts for gas. I'm going to come back to actually quite a few of these points. I am not going to contest your use of the Gulf of Mexico, though, though, are those in Washington who would. But this point about long-term contracts with North Sea producers to guarantee prices that are not linked to international gas markets. But how likely is it that oil and gas majors would agree to that when they do so well from the volatility? Well, depends what they think. I mean, the worry about sign long-term contracts is what happened to British gas again. Is the price might fall on the world market? A point you've just made about a round, which is very interesting. Let me ask you, though, the bigger. If we can just step back, the bigger question you're making about whether we can get out of gas in the end, because I think people listening to this would be thinking, yes, but in the end, we want to stop burning gas, as you were saying, and you've described why, right at the moment, that is not possible if you want to keep the lights on. But what would be a road? That would That would advise this government, look, if you want to get out of gas in the end, what would it be? Wait for it. for batteries, do more nuclear, what would you tell them? - Well, if you want to get out of gas, if you wanna get out of gas, you wanna get out of it for the economy. What you're really talking about at the moment is a modern industrial economy, trying to build AI industries, data centers, all sorts of other stuff, based upon wind and solar, no coal, no gas, we're not burning all to make electricity, okay? So it's wind solar and nuclear power. Well, if you really meant that, then we should be going for 50%, 60%, 70% of our electricity from nuclear, and even then we'd have some difficulties, right? We struggled about one nuclear power station at 16 billion gigawatt. It's not gonna happen anytime soon. - This is both the planning reasons and for project management reasons. If I can use that euphemism. A planning has got virtually nothing to do with it. It's all a side show. The reality is if you want to build nuclear power stations, you have to build a lot of them. France built 50 something, and at one stage you're building six simultaneously. You have to have a complete supply chain. - There's a supply chain point, but there's also a planning point, if you imagine building dozens of nuclear power stations across Britain, I can't believe that planning wouldn't become an issue. - Let's roll back from that, okay? So the plan was to build four large reactors when Hinkley eventually emerged out of this, you know? And it's a program. I don't know if we're all gonna be built on existing nuclear sites. Was there really a planning problem of building Hinkley on Hinkley nuclear site, similarly for the well-shlocation, et cetera? We've got the sites. It's not a problem, right? And when people have a great to do about, oh well, it's all to do with it. We're paying 16 billion gigawatt because we have to have some sound system keep fish away from a water entrance. Really, that's determined whether a nuclear is competitive or not, but it makes great sense. We've got it all planning. Planning isn't a problem. If the government decided to have a full nuclear program and it legislated for it, and it set up all the ancillary industrial strategy for doing it, it could be done. It's very unlikely to happen in the UK anytime soon. So you go back to an energy system, which is driven back to wind and solar, and what else? And the answer is gas. And it doesn't go away because you wanted to go away. It goes away if you found something to do the same job at the same cost or better, and we haven't. - So let me just ask you, right, if you come right to the present, and you're advising the prime minister, and he is trying to work out whether he can and should do something to help British households and businesses during the spike of energy costs during the Iran conflict. What would you say? - So I would start by saying, here's the good news. The good news is that the crisis is big enough for industry and for poorer customers. That sticky plastic will not work. So a little bung here for a few consumers here, a hundred million here for a fertiliser factory to keep it going for a bit. A bailout for the steel industry isn't going to do it. You have to do it properly. That's your real opportunity. And if you would a stand back, you'd realize that virtually everyone will come to the conclusion, yes, you have to do this properly, right? We have to reinvent security. That means storage. There are storage options now. We have to be serious about North Sea, which means saying to all the gas companies, if you want to build a new oil gas well in the North Sea, you can do so in a license, but we want to contract. If you don't want to have a contract, don't have a license. With that position at the moment, we're not giving them licenses, right? And actually, if I was a company, I'd say, you tell me what the long term contract is, but I think I'd find that very attractive compared with the vagaries of what might happen to falling all the gas prices. - Okay, so you try and get some more, you do something about the North Sea. - Okay, but customers, domestic customers, I would have a serious social talent. Our regard energy as a social primary good, which every citizen should be entitled to in this country. And as a result, we should have a tariff which enables everyone to have access to that system. - Just six feet what you mean by a social tariff. Do you wait it towards people who can't afford it? - We can do a variety of different ways. There's no perfect social task. We can do blocked tariffs by saying, a certain amount of electricity is extremely cheap. We can do it by income if you want to do a income related security framework. There are a variety of parameters. We're not shorter parameters, all we're short of is perfect parameters. The final one is we have to address industry. And as I've set out, we should charge industry with a system marginal cost so that it covers its variable cost, actual marginal cost of what it's using, plus make some contribution to the fixed cost of the system but not pay them all. - Do you know, I actually woke up this morning wondering if we could get through this without the phrase marginal cost. So you're talking about getting industry to pay a share of the cost of the actual system, not just the energy it's using. - But only the standard share, not all of it, or not the full bulk that it currently does. - Okay, so you've got three things in there. You've got, go get yourself some more supplies of energy. You've got yes to something, depending on your political objectives about households and yes, help industry but get industry to pay more of the costs of the whole system. - No, no, not to pay lots of the costs of the whole system when they currently are doing. That's a key equation. Now the other bits, if I was advising would say, says a crisis and fumbling on thinking you might build another nuclear power station, is worse than not building any at all. I'd do it properly for proper industrial policy or don't bother because what you're doing is about as expensive as it possibly can be. So let's do nuclear properly or not at all. That's a choice, okay? And then be realistic. So your system will need gas for quite a long time to come. Instead of just saying we're getting out of gas and always mumbo jumbo, reality is different. Make sure our gas system is properly invested. This properly maintained and it's capable of delivering stability to the market as we're required. And I throw in on top, by the time you've built the next round of wind farms, which are going to be holding our prices high until 2045, have a pause. We don't need any more offshore wind farms now. We might in the future, but we've got a hell of a lot. And that's a plus. It's an opportunity. But stop digging in ever deeper hole when we could do some practical things now and keep everybody on board in trying to address climate change. Why annoy them even more with high bills that they no longer sign up to a consensus to address climate change, which sadly is what politicians have now achieved? I think we are going to have to stop there. There is an awful lot more we can say on that. And I've interested in listeners' reactions to this. We have a lively debate in our climate and energy team, Chris A. Lert, and others write extensively about this. We've heard from Data Helm, whole series of arguments about how the government could improve its mix of energy at this point. And indeed, some aspects of the pricing. We're going to come back to this quite a bit. Do listen to some of our other work on this. And indeed, our continuing coverage from the Middle East, including our interview with President Ahmed Al-Sharah or Syria. Yes, a relevant question in that as well. For now, thank you very much, Professor Data Helm. That's it from me, Roman Maddox, see you next week. [MUSIC PLAYING]