Energy

My predecessor Christopher Fildes looked at exchange rates through a cocktail glass: three negronis for the Italian lira equivalent of a tenner, good; a $2 martini for £1, even better. That latter ratio applied briefly 30 years ago when, he wrote, the favoured tipple ‘brushed against my lips like an angel’s kiss’. It recurred during the financial crisis of 2007-08, when no one was really able to enjoy it, and has never been seen since. On Monday, as Liz Truss was crowned, the pound dipped below $1.15, in sight of its 1985 all-time low of $1.05. ‘The prospect of …parity versus the dollar,’ said Bloomberg, ‘is becoming ever less outlandish.’

The new Prime Minister’s honeymoon starts and ends today. Once Liz Truss formally enters Downing Street tomorrow she will be under pressure to tackle the enormous economic crises facing the country, with very little time to announce her policy plans. Truss herself has pledged to reveal her plan for rising energy bills within the first week of her premiership, and her plans to slash tax within the first month. While at the forefront of political discussion, these are but a few of the emergencies that the government must grapple with in the weeks and months ahead. Below are ten graphs that the Truss administration can’t ignore if she and her government

How outraged should we be that Saudi Aramco has reported a world-record quarterly profit of $48 billion, representing a giant bonus from the global oil price spike provoked by the war in Ukraine? Well, that’s how the cookie crumbles when you’re sitting on oil reserves so abundant and so easily accessible that your marginal cost of producing the next barrel is less than $10 when the market price has just doubled to $130 – as it did in March, before settling back to around $95 today. And you might think that this recent price retreat is likely to continue as oil demand begins to shrink with the onset of recession

This summer marks a truce. But if, as expected, Liz Truss becomes prime minister, it is almost inevitable that tensions over the Northern Ireland protocol will resurface. Britain has been threatened with trade barriers if it tears up the protocol, with implications for import and export industries. But one possible consequence has been largely overlooked, in spite of the gathering energy crisis: the trade in gas and electricity. Imported power via undersea interconnectors is the forgotten but fast-growing element of our electricity system. In 2019, 6.1 per cent of our electricity was imported. Undersea power interconnectors, which have been a feature of the UK electricity system since 1986 when the first one plugged

The debate about energy in the UK has largely concentrated on just how high prices will go. This is understandable given how seismic the October and January increases in the energy price cap are likely to be. But today’s announcement from Norway that it will prioritise refilling domestic reservoirs over exporting hydropower to countries like the UK is a reminder that supply may soon become an issue too. In a crisis, borders reassert themselves as Covid showed. What happened with PPE and medical supplies during the pandemic may well happen with energy this winter. This is a concern for the UK given that it imports large quantities of energy during the

‘What’s worse, they’re paying the profits to shareholders,’ said a grey-haired woman ahead of me in the Co-op queue. ‘Bloody shareholders,’ her friend of similar age and class spat back. I guessed they were talking about Centrica, parent of British Gas, which at a time when domestic energy bills are rising 23 times faster than wages (as Frances O’Grady of the TUC puts it) has announced half-year operating profits of £1.3 billion, up from £262 million last year – and the restoration of a penny-per-share interim dividend after a three-year gap. Both ladies looked likely to be beneficiaries of pensions nourished by dividends from the likes of Centrica, Shell and