It is of course good news that the Ofgem price cap for a dual fuel household bill will fall from £1,928 to £1,690 from April (that is the bill paid by the average householder). It means that there should be strong downwards pressure on inflation (the Consumer Prices Index) in April. Barring a jolt in inflation in other goods and services or an acceleration in earnings it ought to mean the Bank of England finally has the courage to cut its base rate, probably in May.

None of that, though, should distract from the fact that energy prices in Britain remain far too high. For one thing, the huge fall in wholesale gas prices since their peak of 634 pence per therm in August 2022 has not yet been fully passed on. The wholesale gas price today is 55.6 pence per therm, back to where it was in the spring of 2021. At that point, however, the Ofgem price cap stood at £1,138, some £500 below where it will be in April and over £700 lower than it is at present.

The UK electricity market continues to be distorted by marginal pricing – where the wholesale price of electricity is fixed every half hour by the highest bid accepted for that period. In other words, if Britain is consuming 40 gigawatts of electricity, and the market can only supply that by resorting to 0.1 gigawatts of expensive battery storage at £300 per megawatt-hour, then everyone supplying electricity for that half hour will be paid at a rate of £300 per megawatt-hour, even if the it costs them a small fraction of this and their own bids were far lower. The more reliant Britain becomes on intermittent wind and solar energy, the worse this problem will become, because there will be every greater need for expensive back-up generators to switched into the grid at short notice.

While gas prices have come down, the price of wind and solar energy is going in the other direction, thanks to higher interest rates and commodity prices. Last September, the government increased the maximum long-term guaranteed prices offered to operators of offshore wind farms by 70 per cent after its latest round of auctions in July failed to attract a single bid.

High energy prices remain a huge barrier to investment in heavy industry in Britain. Earlier this week Ineos boss (and new Manchester United co-owner) Jim Ratcliffe warned that Europe will lose all its chemical industry over the next 20 years unless it reduces bureaucracy and lowers energy prices. His business, he said, is paying four times as much for its electricity in Europe as it does in the US and five times as much for its gas.

Moreover, energy prices are only likely to go up over the course of the next Parliament, whoever wins the next election, as the Conservatives attempt to phase out gas-fired electricity from the grid by 2035 and Labour says it will do it by 2030. What back-up they are proposing to use to balance intermittent wind and solar energy isn’t clear, but it won’t be cheap. We may well look back on the current time – or even the winter of 2022/23 – as a golden age of just-about-affordable energy.