In the face of mounting energy crises and the looming specter of winter, the call for decisive action from the UK's energy secretary, Ed Miliband, is becoming increasingly urgent. The recent surge in energy costs, driven by the US-Israel war on Iran and the resulting impact on liquefied natural gas (LNG) supplies, has sparked a critical debate. While Miliband's commitment to a clean, green power plan is commendable, the question arises: what immediate steps can be taken to mitigate the impending cost of living crisis? This is where a new paper by economist Patricia Pino for the Common Wealth thinktank comes in, offering a compelling argument for direct intervention in the gas and electricity markets. Pino's analysis reveals a crucial insight: the problem is not merely a lack of demand reduction, but rather the insufficient pace at which demand is falling relative to declining domestic production and surging winter peak requirements. This imbalance has led to the costly LNG setting energy prices, leaving the UK vulnerable. Pino's prescription for addressing this vulnerability is twofold. Firstly, Miliband should intervene directly in the gas and electricity markets, making domestic gas cheaper than European gas and nationalizing Centrica's Rough gas storage facility as a buffer stock to smooth out peak prices. Secondly, the government should buy electricity at a fixed price from clean providers and allocate it to suppliers, thereby changing the incentives that led to the emergency price spikes in the first place. The timing of these interventions is crucial. Between April and September, the state can take several actions: retain more domestic gas through an export levy, fill a buffer stock before winter while demand is lower, signal import support before gas supplies are committed elsewhere, and move part of the electricity system off gas-indexed pricing before wholesale spikes feed into retail bills. While none of these measures are easy, the alternative is a delay that leaves the UK more exposed to conditions beyond its control. Immediate intervention shifts Britain from being braced for impact to actively managing supply, demand, and prices. In my opinion, the paper's key message is clear: there is much that can be done before winter to stave off a cost of living crisis. While Miliband is right to emphasize the need for clean power by 2030, the paper's focus on immediate action to address the current crisis is a welcome reminder of the importance of taking proactive steps to safeguard the well-being of British households. The challenge now is to translate this analysis into concrete policy action, ensuring that the UK is better prepared for the energy shocks that lie ahead.
