And so our energy bills are set to rise, thanks to government subsidies to nuclear and renewable energies, and penalties for energy production via traditional fossil fuels. And many are up in arms. But surely the critics of these plans miss the point.

Yesterday the government revealed plans to guarantee the price of electricity, which helps the nuclear power industry in its planning, thereby encouraging investment. It is also planning to offer subsidies to younger technologies, such as wind and solar, but is planning to hit the carbon price, making dirty coal expensive.

And the critics line up, but, if you believe in man-made global warming, then of course bills must rise. How else are we to pay for avoiding this; via the tooth fairy?

Secondly, it is possible, indeed likely, that in the long term, alternatives to traditional fuels will actually become much cheaper than fossil fuels are at the moment. In fact, if we play this
right we could end up with almost unlimited supplies of ultra-efficient renewable energy in the future.

The snag is, oil has benefited from literally trillions of dollars of investment and specialisation. Had solar, wind, tide or synthetic organisms seen similar levels of investment, then right now I would imagine our energy costs would be much, much lower.

In order to compensate for the advantages afforded to oil by the sheer fact it was first, and that its exploitation has benefited from greater levels of specialisation in the energy business, then alternatives should be subsidised.

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