Breaking the Link, Buying the Premium

On 28 October the Chancellor delivers a Budget expected to legislate an extension of the Electricity Generator Levy. That levy is not really a tax measure. It is the stick in a scheme to move about a third of Britain's generation onto fixed-price contracts, and to persuade voters that gas and electricity prices have been uncoupled. The mechanism is defensible. The claim is not. With day-ahead gas at 186 p/therm, this is an expensive moment to go shopping for certainty.