"The Way We Price Electricity In This Country Is Complete Nonsense" | Energy Prices To Jump By 13%

Added: 2026-05-28

[00:00:00]That's right. Well, let's talk right now about your energy bills, which yes, I know it's going to come as a complete surprise to you, about to go up again.

[00:00:06]Offshe this morning at 7:00 announced the latest uh price cap. And what a surprise. We long had this predicted that after the cut uh the last three months, uh it's going to be going up from July. And wow, what a big rise. 221 pound increase in total over the year as from July. That your average bill for your joint gas electricity is going to be 1 862.

[00:00:32]That's up 13%. And they put that down to the surge in oil and gas prices as a result of the Iran conflict. Well, let's talk about this with Angela Knight.

[00:00:40]She's the former chief executive of Energy UK, the company representing energy uh companies in this uh the organization representing energy companies in this country. Uh Angela, thank you so much for joining us.

[00:00:52]>> Good morning. It's a pleasure. It's not a pleasure to have is it?

[00:00:56]>> No, indeed. I I was just going to say it's always a pleasure to speak to Apart from the fact we're always doing it in when it's bad news. We're never going, "Hey, yay, Angela. All our energy bills have hved. Isn't life great? Let's all go and spend more money on ice cream in the hot weather." It's always bad news.

[00:01:10]Um, explain why we have a situation where our energy bill the energy caps brought our bills down a few months ago and as of July, they're going to go up again.

[00:01:22]Well, they came down a little while ago simply because the government took at least some of those additional costs which they add on your bill. By they, I mean the government and its policies add on the bill. They took some of that off.

[00:01:34]It's going up now because the world price of gas has gone up and it's gone up because of this blockage of the straits of Hormuz and the war that's taking place there. uh which I think is an example of how external factors can affect us and indeed every other country and why we need to actually be pursuing a policy which focuses on keeping the price down of our energy rather than putting it up in chasing this net zero for >> well this is the interesting thing and this is something that Tony Blair in his long essay criticizing gun policies has talked about the need to have you know affordable energy especially for the future of AI which uses absurd amounts of energy. But it's interesting within a minute of this price cap being announced, Ed Milliban, the uh energy security or net zero secretary can't be both. He says the rise of the price cap because of a war we did not choose is deeply unwelcome news for households across the country. Um but he will continue to mon the situation. He says it's the second fossil fuel crisis of this decade. We must learn the right lessons. The way to get bills down for good, says Ed Milliband, and avoid these price specs is to go further and faster with our drive for clean homegrown power that we control. He wants more wind, more solar. If we had more wind and more solar, would that mean we would not be hit by a similar? It did say in the next 10 years we went for that, would that mean we wouldn't be hit so hard uh by the like things like the Iran conflict?

[00:03:05]>> Not necessarily. No, because you will still need something that you can switch on and power up and send electricity to our homes when the sun isn't shining and the wind isn't blowing. That's the fundamental point. If we are going to be far more self-sufficient, there's a few things that we need to do. First of all is get building more of these smallcale nuclear reactors. Keep on talking about them. They keep being announced.

[00:03:31]>> We haven't yet got one going. other countries have. But that type of uh nuclear power in our in our country, that's a very that was a very important thing.

[00:03:42]>> I mean, France has got them every sort of 10 miles. You can't move for nuclear reactors.

[00:03:46]>> Oh, it's it's that's fairly true. I mean, it's it's been into nuclear big time. They've built the huge ones and of course they're building one in this country as well. the small scale ones can be done more rapidly and what's more can be put to places put up in places which are wanting the power. The second thing is that energy security is helped by us pulling gas out of the North Sea.

[00:04:10]There's no two ways about it. It is ridiculous to say we can bring it in from somewhere not very nice but we can't do it ourselves and especially when Norway is all uh type um tapped into the same um part of you know the same North Sea same basin if you like as we are now people will say to you that won't do anything for on price to a certain extent they are correct as long as that is what we're proposing to do is continue to buy gas on the world market but let's see what we can do ourselves.

[00:04:42]We don't have to be totally on that world market and there's a lot more we can do ourselves >> and it's cheaper to get the gas but it's surely cheaper to get the gas out of our own oil field our own gas and oil fields. Of >> course it is. Of course it is >> because it's going by pipe as opposed to you know liquified.

[00:05:01]>> Yeah, that's right. Put Yeah. Putting it on board a ship and and bring it a few thousand miles. But the third thing, and you've heard me say this before, is why is it that our electricity is all priced off whatever is today's price in gas?

[00:05:17]And that is a nonsense. That's the algorithm, the equation if you like, that we use. And that needs to be reformed.

[00:05:24]>> And that's that's a government decision.

[00:05:26]That's not some we always talk about this is what it is. So it's basically you can have 99% of your your your energy needs. Well, again, it's only electricity that can be renewable. And then and then that last bit, you need to have the gas to cover and the cost of that last bit of gas that will set the price for I mean that someone literally just made that up, didn't they?

[00:05:45]>> Yes. Yes, they did. That was that that's that's quite an old algorithm. Um I mean I if I say it's it's 15 years there or thereabouts, something like that.

[00:05:57]>> But it's completely unnecessary. But also, of course, we got all these subsidies, haven't we? But the other the key thing is we are not going to be moving away to the point where we're not going to need gas to heat our homes.

[00:06:07]We're not going to need gas and oil for vast amount of things that we do. 80% of our energy needs are still, you know, you know, gas energy. They're not electricity. It's a nonsense to think we won't be hit. And anyway, the rest of the country has the rest of the world has global price commodity prices and and and they're not hit in the same way as us. I mean, it can't, you know, it can't be it can't be just that. Exactly right. Of course the global price will affect but it isn't the only thing and whilst I can understand why they put together this complicated way of pricing uh at the start to look at it now it seems daft that we don't price the hydrocarbon on the hydrocarbon price and the you know the solar on the solar price the wind on the wind or something along those sorts of lines. what I would call a weighted average. It's not necessarily easy. One of these things you can do overnight and there'll always be somebody who's the wrong side of the line, but for heaven's sake, that is the way to bring down the cost of electricity in this country. Okay, that would be helpful and for industry as well.

[00:07:09]>> Thank you so much, Angela Knight, former CEO of Energy UK. Thank you for that clip. I mean, I muddling my words there because I get so frustrated about the madness of this just insane. We are simply not here. They think it's global prices. It's not because we are far higher far far harder hit than any other country and that's because of our mad policies.

[00:07:28]>> Yeah, absolutely. We're too reliant upon uh shipping that stuff across to the UK when we've got oil and gas fields that we could be exploiting for our own people. I don't get the objection to frack under our grounds. I mean again one thing Labour was saying on was like building a load of nuclear reactors.

[00:07:45]Where where are they started? put a spade in the ground and start building the darn things. Meanwhile, your bills going up and they are going to go up more in the final quarter of the year.

[00:07:55]They will absolutely be going up more.

[00:07:56]Especially, it doesn't look like this Iran conflict's going anywhere soon.