... because instead of taking the opportunity for a clean break, Huhne's successor Ed Davey appears set to carry on with the Huhnite delusion. The chances of there being any pleasant surprises when he publishes the Electricity Market 'Reforms' later this week are slender: we pretty much know what we are getting.
In particular we shall find out that new nukes are to be paid for via a 'contract for difference', i.e. a vast 2-way swap with very high strike price. Recently there have been mutterings from the only plausible beneficiary of this (the French) that it will be of no use to them unless the counterparty is HMG (well of course: think of the credit risk on a derivative that is designedly so far out of the money !); and counter-mutterings that this would constitute state aid and is therefore not possible under EU regs. A nice dilemma ! and yet another reductio ad absurdum which ought to be understood for what it is: proof that only governments can do nukes.
I wouldn't normally quote industry participants on such matters because they are all in the queue for subsidies of one sort or another and just talking their own book. However, with RWE having withdrawn from the new-nukes game, Volker Beckers (their UK CEO) may be viewed as slightly more neutral than most. This from the Sunday Telegraph:
'He questioned the Government’s approach to energy sector reform, which includes separate overhauls of retail markets and networks as well as the various elements of the Energy Bill. “Pulling so many levers at once in such a complex area risks losing sight of your original objectives”'.
Yes, as well as being fatuous, the 'reforms' could very well completely bugger the workings of the UK electricity market. Although the government continues to talk of 'market solutions', there is the strong possibility of the reintroduction by confusion and stealth of a command-and-control, CEGB-style electricity sector. The lights will start to flicker anyway.
And in all events, astronomical costs are being needlessly foisted on electricity consumers. An astonishing tale of half a decade of bungling.