ENERGY & EPR PAIN

Depeche Mode once sang about ‘a pain that I’m used to’ and this morning’s energy price cap headlines confirmed that pain.

It’s a pain that I’m getting used to at least 4 times a year because since the ‘pants’ cap was introduced back in 2019, all we’ve seen is our bills steadily increasing as illustrated by this fabulous bar chart produced by Bionic.

The 'Pants' Cap

It won’t be long before each bar is consistently over the £2K mark especially if the trend for non-payment of bills continues or supplier’s start going bust as a result of ongoing wars pushing up wholesale costs. Smaller companies that can’t afford to hedge by buying cheaply in advance are going to struggle to weather this storm. Oh yes and naturally, Ofgem will protect them by pushing the cap upwards.

Muppet Miliband’s great push for more renewable energy sources is noble but flawed all the time the cost of electricity is wedded to gas prices. That divorce has long been overdue but I suspect it won’t happen in my lifetime. Any remaining UK industry, already on its knees, will be left without a shirt on its back too before anyone sees sense and de-couples this pricing mechanism.

War is also playing straight into Ed’s hands in that issues affecting LNG (liquified natural gas) are going to give him carte blanche to push up gas bills exponentially especially as the UK imports about 15-20% of the country’s gas supply.

My guess is that what we’ll begin to see on our bills is a continued harmonisation between the cost of electricity and gas. Given time, it’ll no longer be cheaper to have gas cooking or heating because it will cost exactly the same as electric. Good news for UK plc as it won’t need to pay so much for imported gas, bad news for Punter plc as we’ll all be paying through the nose.

Luckily, germinating beans requires zero energy other than that produced for free by the force of the sun’s rays. Almost within days of planting my last lot of seeds, germination has succeeded thanks to a combination of this unprecedented May heatwave and a few scoops of top soil. NO peat-free compost was used in the making of this production!

Hurrah!   Beans have sprouted

Beady-eyed readers may have noticed that instead of using a fancy propagator, I’ve used a re-purposed plastic container following a tasty chicken drummy dinner. And this brings me to a new ‘pain’ that we’re all going to have to get used to – it’s called EPR or Extended Producer Responsibility.

EPR is a new environmental levy about to be foist upon businesses who produce or supply items that create waste packaging. Its intention is that by charging manufacturers for unsustainable packaging, companies will design more recyclable products thus reducing the waste management burden.

Of course, as we all know, any Government levy or tax on business in any way, shape or form is never simply absorbed by companies from their profit margins but is immediately passed down the line to the end user. Expect to see food prices increase to cover retailer’s additional costs of EPR as the Government’s not going to back down over this policy.

So, the pains we’re getting used to: increased energy costs, food and petrol prices, rising inflation and if this heatwave continues – water shortages. 

Get ready for that hose-pipe ban. I can feel it in my water!