Power

Vladimir Putin has been regaling TV viewers with his memories of the good old Soviet days when electricity was cheap and Russians paid their utility bills on the nail. But fond stories from the Russian prime minister’s past may just rub salt in the wounds of his people as a sharp increase in energy prices kicks in.

The government has sanctioned a 15 per cent increase in household electricity tariffs in 2011 – well above its inflation target. And in a final break with the Soviet past, energy prices for industrial consumers have been deregulated altogether.

Kiran Stacey

This morning’s clampdown by the UK regulator on the country’s big six utilities was unexpectedly hard-hitting.

Apart from the news that the companies may be forced to auction up to 20 per cent of their electricity generation output, there was the harsh tone struck by the regulator’s chief executive, Alistair Buchanan. He said:

Energy companies have failed to play it straight with consumers and so Ofgem is proposing to break the stranglehold the Big Six have over the electricity market.

Sheila McNulty

Bad news for those out there with high hopes of moving quickly to convert the world to electric vehicles.

A new report by Accenture, the consultancy, says that the large-scale rollout of plug-in electric vehicles will be hindered unless investors stimulate demand, lower the cost of public charging infrastructure and manage the impact on the grid. Those are three pretty big challenges.

The report is based on analysis of electric vehicles trials around the world – from Japan to The Netherlands to the UK.

Kiran Stacey

Another day, another complaint about the carbon floor price. This controversial policy has united an unlikely alliance of green campaigners and heavy industry in opposition.

Greens don’t like it because it benefits the nuclear industry, while manufacturers are disgruntled about having to pay more for electricity.

But Greenpeace and WWF had a legitimate claim that government policy was incoherent – on the one hand promising no subsidies to nuclear power but at the same time implementing a policy that could indeed earn such generators billions of pounds. The EEF, which represents manufacturers, on the other hand, is criticising the energy department for doing exactly what it intends to do: push up the cost of energy.

Sheila McNulty

ExxonMobil has made some interesting – if not surprising – forecasts in its annual Outlook for Energy, in which it projects long-term energy trends. The report is not just what Exxon hopes will happen but rather based on detailed analysis of 100 countries, 15 demand sectors and 20 fuel types.

It says energy demand in developing nations will rise more than 70 per cent through 2030 even as energy efficiency measures keep demand flat in the developed world. So, combining the developing and developed world, overall global energy demand will rise 35 per cent from 2005 levels.

Kiran Stacey

In this week’s readers’ Q&A session, Magued Eldaief, the head of GE’s UK energy business, answers your questions.

In the first of two posts, he discusses the future for nuclear power in northern Europe, wind power in the developing world and whether it is better to back small- or large-scale power generation projects.

In the second post, he discusses subsidies for carbon capture and storage, legislation to curb emissions and the future of smart metering.

Next in the hotseat is Iam Simm, chief executive of Impax Asset Management. He will be answering your questions next Friday, January 28th. Send in your questions for consideration by the end of Sunday, January 23rd to energysource@ft.com.

But for now, over to Magued:

Kiran Stacey

And then there was one. After Eon announced on Tuesday that it would increase electricity prices by 9 per cent and gas prices by 3 per cent, that leaves only EDF of the big six who have frozen charges over the winter.

The row that has followed runs along the same lines as that which came after British Gas made a similar announcement last year. The company says wholesale energy prices have risen, but won’t go into detail about their purchasing agreements.

Consumer groups and some analysts argue that companies can and should be more flexible with their supplier agreements to take advantage of low prices when they can. They also say that companies are more reluctant to lower prices when wholesale prices fall than they are to raise them when they rise.

It seems consumers’ best chance of being certain they are getting a fair deal is to hope for decisive action from Ofgem when the regulator announces the results of its probe into energy prices.

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