Leave aside the question of whether energy companies are charging too much for power. There is the separate question of the European emissions trading scheme (ETS) windfall, addressed elsewhere on this blog.
Earlier this year, Ofgem said power companies had ended up with a £9bn windfall because of a quirk in the scheme. In its second phase polluting companies must buy on average 7 per cent of the permits they need to pollute. For power companies it’s about 30 per cent.
Yet the price of electricity has risen as if companies had to pay for 100 per cent of their permits. Thus the Ofgem figure.
But the £9bn was based on carbon permits at £20 each, whereas the market price is now £25 to £30. That means MPs, unions and others who complain about the ETS windfall can now use a new figure……well north of £11bn.