Former UK Prime Minister Boris Johnson has criticized the United Kingdom's current energy policy, stating that electricity costs are "out of control" and are harming consumers and industry. Johnson advocates for a market-driven approach to energy pricing, drawing a comparison with the state of Texas in the United States.
Johnson contends that the UK is producing an abundance of renewable energy, particularly from wind power, but faces issues with grid capacity and high costs. He points to the practice of paying wind farms to shut down on windy days because the grid cannot handle the excess electricity. This, he argues, contributes to the high price of electricity, which is increasingly determined by the cost of gas, the last unit needed to keep the lights on.
"We are walloping consumers, we are crippling our industry and we are deterring anyone who wants to invest in the UK," Johnson wrote. He also blames "Net Zero stuff" and policies enacted by former Energy Secretary Ed Miliband for compounding these issues.
While acknowledging the need for more nuclear power and the continued use of domestic hydrocarbons, Johnson dismisses the idea of abandoning renewables or solely relying on fossil fuels. He argues that the UK does not have sufficient North Sea reserves to avoid vulnerability to global gas prices.
Johnson highlights Texas as a successful model, noting the significant increase in wind and solar power in the state over the past 15 years. Together, renewables now constitute about 37 percent of Texas's electricity market. He states that Texas has achieved this without the price spikes seen in the UK and with electricity prices for consumers remaining roughly half those in the UK.
"One of the reasons the Texas renewables programme has been so much more successful than ours is that they don’t have some demented Soviet-style Gosplan national price. Like Sweden, and an increasing number of countries around the world, they have local pricing," Johnson explained. This system, he suggests, results in very cheap electricity in areas with abundant wind farms, attracting substantial business investment in energy-intensive industries and data centers.
Johnson proposes that the UK adopt a similar model, with local pricing for electricity. He believes this would benefit regions with high renewable energy capacity, such as Scotland and the North East, by lowering local bills and incentivizing investment. He argues that eliminating costly practices like curtailment payments, which are projected to rise significantly, would allow a real market to reduce electricity prices across the country, while acknowledging that some areas would see larger reductions than others.
"Get rid of socialist equality of misery and let the market work," Johnson urged, calling for a move away from a "crazy one-size-fits-all pricing system" towards harnessing Britain's renewable potential through market forces.