Uh oh. Just when you thought that energy pricing and profiteering were going to be reined in by a Competition Commission inquiry, the Old Growlers have played the fear card - again. 

I'm not sure how many times "the lights might go out," but it does seem that whenever the big six energy companies wants cash this is the card they play. 

If you don't give us more subsidies the lights might go out. If we don't get new tax allowances the lights might go out. If you want to cut energy prices... the lights might go out. If we don't get best seats for the World Cup, and get included in the New Year's Honours List, and a date with Angelina Jolie...

The demands are endless, but the threat is always the same - a Britain plunged into darkness by the unrealistic demands for a more accountable (and sustainable) energy market. But what if we called their bluff?

The first thing we've been told is that this inquiry will kill off energy investment. Some £200 billion of infrastructure investment will go awol, and park itself on the beaches of Torremolinos until the outcome of the inquiry is known. This is either hype or
Horlicks.

When energy companies trail the £200bn figure around they conveniently forget that a privatised energy sector was supposed to have made provision for this investment, as part of the competitive freedoms that were to flow from privatisation.

As ideological doubters pointed out at the time, privatisation was always going to lead to short-term profiteering at the expense of long-term investment. The big investments would go into energy behemoths acquiring each other. It would turn into a race to become the biggest beasts lurking behind the facade of a competitive energy market. But now even the beasts are beginning to panic.

Corporate welfare

If you were to unbundle the infrastructure investment costs, the figures are not that scary - £200bn over the next 20 years is only £10bn per year. If the taxpayer were to pick up the tab, even at (say) 10 per cent, the interest repayment costs would run to £1bn per year. Spread across the UK's 25 million energy customers, it would add £40 per year to energy bills. Hardly an unaffordable price for keeping the lights on. 

Moreover, as each year progresses, previous investment - from 10-15 years ago - rolls off the books, so there is no accumulation of annual payback costs. 

The problem is that this is not the problem.

Across the international landscape, energy utilities are having to offer higher and higher dividends to a financial sector increasingly unwilling to invest in them. It is predicted that half of Europe's energy companies will go bust within the coming decade.

Power stations are becoming like Commodore 64s. Smart technology is outstripping them and the existing infrastructure responds poorly to society's more complex needs for heat, transport and power. No-one is buying any more. The game has moved on. Only Britain fails to grasp this.

Even before any competition inquiry, energy companies had been mothballing their gas power stations and "parking" all the "permissions" granted to build new ones.

The explanation was that the huge growth of renewable energy, and a glut of cheap (US) coal, has been pushing down European power prices.

As soon as there are big subsidies to be had, energy companies will once again come to the nation's rescue and keep the lights on. Phew.

But they will only do so when the taxpayer, rather than the market, coughs up the cash to pay for whatever power stations we need. So, before we go dashing for our cheque books, the country ought to at least debate the other options we have.

Economics of 'less'

If you give even a moment's thought to the latest IPCC report on climate change you will know that the business as usual model of economics is stuffed - and we will be too.

Surviving through tomorrow requires a different mindset. In energy terms, it means delivering more but consuming less. Germany's approach to energy efficiency investment should be a model for us all.

I am no longer convinced that conventional growth economics is sustainable, but the Germans have been growing their GDP at the same time as lowering energy consumption and greenhouse gas emissions.

The latest figures suggest that Germany has been reducing its energy consumption by 400MW per month. This is the equivalent of needing five fewer power stations a year.

So, before we leap into a panic buy of new power stations we should develop a new economics of needing less. Countries going down this path are also discovering it is the cheapest and most efficient way of delivering new jobs, tomorrow's skills, decent wages and deficit reduction.

My grandad wasn't an economist, but he always told us that the only money-go-round worth being on was one that fed its citizens rather than its corporations. Not a bad place to start.

Socialising short-term

A serious programme of reducing energy consumption would take at least the rest of the decade to deliver. In the meantime, what do we do with the lights? 

Any government with half a brain would begin by refusing to get into the blackmail game. First, they could just make it a statutory duty on all big energy companies to hold a 10 per cent capacity margin above peak demand requirements.

We seem to have forgotten that the prospect of prison or fines is just as effective as 'subsidies' in delivering market change.

The government could also set up a national agency to take over all mothballed power stations (and permissions) that were deemed necessary for energy security.

Capacity payments could then be used to acquire such stranded assets (at car-boot prices) so they were no longer a burden on energy company books.

It would mean using public money to acquire public assets rather than to prop up a private welfare state.

One consequence is that we would reclaim the notion of the "strategic reserve."

Why try to create a competitive market for the most marginal and unpredictable aspect of the energy market? The financial mark-up becomes colossal. This is where the state should deliver the safety net. 

Investment in new interconnectors falls into the same category. They cannot be built around "a secure rate of return on investment," requiring a high level of use.

These are the safety net provisions that keep the lights on. And the compelling case for social ownership is that it puts the provision into a "public, for safety" rather than "private, for profit" basket.

A new 'B&B' culture

Creating a new B&B culture is not a call for a new generation of seaside landladies. It is about understanding that tomorrow's energy systems will need different "balancing and backup" mechanisms. 

As more and more renewable energy becomes available, balancing technologies - that can store and save energy - will become more important than new power stations. Lots are already in the pipeline.

Getting into discussions with engineers about this can be a dangerous exercise. The good news is that almost everyone has their own preferred solution.

In truth, there are more likely to be a thousand answers than a single one - and the balance will change according to whether you are looking for electricity, heating/cooling or cooking. But answers there are.

In his book Hot Air, former government chief scientist David Mackay makes the case for dual-pool tidal lagoon energy storage systems with a 40GW capacity (with 8GW being almost instantly available). Those keen on such an option know that Britain has no shortage of coastlines battered by the sea.

Other interests veer towards inter-seasonal storage, in which case you are probably talking about turning renewable energy surpluses into gas (or hot water) storage systems.

At the other end of the scale, a huge amount of work in the US focuses on household and community-scale storage. The possibilities are truly exciting, but none of the beneficiaries are likely to be the big six utilities.

If localities are given new powers to sell their own energy back to themselves, at rates well below retail grid prices, they will also lead the way into innovative methods of storing surpluses and balancing demand. 

Then, inside our (better insulated) homes, the lights will stay on. The bills can come down. Only the wolves will be left outside the door. 

And they'll huff and they'll puff, but then who gives a stuff?

Alan Simpson is an independent energy adviser who stepped down as a Labour MP in 2010