Debate on the Address

But that is not the reason for the locational charging of Ofgem. The reason is that it has calculated where it wants power stations to be and is sending out market signals. A former Member of the House, David Ricardo, arguably the greatest economist England ever produced, developed a theory of comparative advantage and put it forward here. Ofgem economists seem never to have read David Ricardo, as if he wasted his time in developing his economic work. Ofgem argues that it is entitled to send out market signals so that it can dictate where power stations should or should not be. That is nonsense. Transportation costs across the grid are not acceptable, but Ofgem is trying to influence where power stations should be located. It is a disastrous policy. According to Talisman Energy, which is developing a gigawatt—1,000 MW—deep offshore wind farm in the Moray Firth, that policy is the single greatest impediment to the commercial viability of its project. It is daft policy, which conflicts with other policies and needs to be changed.