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The Guardian - UK
The Guardian - UK
Business

We have intervened in the energy market

Your editorial (5 January) shows a complete misunderstanding of the issues surrounding powering the country. In 2010, we inherited a legacy of underinvestment in the energy sector, with a number of power stations due to close by 2020 and ageing network infrastructure, a legacy that put our energy security at risk. To safeguard our energy supplies, we are implementing a long-term plan, though you appear to be totally unaware of this. Our radical reforms have stimulated more than £45bn of investment, mostly in renewable electricity.

You dismiss our capacity market, yet this has been extremely successful in securing electricity supply at the lowest cost for consumers, as fierce competition in our auction drove costs significantly below predicted levels. As well as unlocking new investment in flexible plants, we are getting the best out of our existing power stations, which provide reliable and cost-effective capacity, as always planned. We are also determined to make homes warmer and more energy-efficient. Average electricity consumption per person is down 10% from five years ago, largely down to schemes like the Green Deal and other regulations making household devices more energy-efficient. Bizarrely, your editorial ends by calling for more state intervention. You clearly do not understand that our reforms of electricity markets, both for clean energy and for securing supply, are significant state interventions in the free market.
Ed Davey MP
Energy and climate change secretary

• Re your article on the fall in oil prices (7 January), one possibility is the opportunity to painlessly raise extra revenue to reduce the deficit or provide additional funding to the health service etc. For the last few years the chancellor has frozen planned rises in fuel tax but now that we are paying 25p less per litre of petrol than we were six months ago, surely no one will notice or mind a 3p rise if the money raised is used effectively.
Brian Westcott
Chester

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