Most of the energy debate – and Government policy – has focused on the wholesale side. Clean Power 2030, the Government’s plan to cut the gas share of the grid to under 5%, is set to lower wholesale prices a bit. The issue is that wholesale costs make up a shrinking segment of our electricity bill. In 2010 wholesale costs made up about 40-50% of the bill. Today, they make up closer to a third. In 2030 that will fall to a quarter.

At the same time, all of those other costs I mentioned are going up. In some cases by a lot. The cost of transmission – building pylons and wires to get power from the wind farms in the North Sea to where people actually live – is set to double. Money spent on distribution, like upgrading substations, will go up too. This investment is there to accommodate a huge surge in forecast electricity demand and a grid where power is increasingly generated by intermittent renewable assets. Still, the amount spent paying wind farms to switch off because the grid can’t take the power they produce will more than quadruple.

Billpayers will also start paying levies for carbon capture, new nuclear under construction, and subsidies to lower industrial power prices. One reason why wholesale costs are falling as a share of bills is that new renewables are financed via long-term fixed-price contracts (known as CfDs). When the wind is really blowing, there will be days where wholesale prices are near zero or even negative. Power won’t be ‘free’ then. Wind farms with CfDs will still get paid the price they agreed at auction.

Britain is also connected to the continent via interconnectors. When prices are near-zero (or lower), Britain will be sending ultra-cheap power to Belgium and France lowering their bills. Meanwhile, British billpayers will be paying to top up the difference via CfD payments. We effectively will be subsidising French households and business, while paying much higher bills ourselves.

Britain’s leaders have sleepwalked into a crisis. For the past two decades, the assumption has been (and still is) that electricity demand will go up massively in the years to come. Yet, predictions of a surge in the demand for power have been consistently wrong. High prices caused by bad policies (and to some extent, bad luck) led to a 16% drop in electricity consumption over the past 20 years.

There’s plenty to do to make electricity cheap.

But, there is a risk that rather than adopting policies that would cut prices, Britain will instead double down on more expensive power. In response to oil and gas prices spiking after Trump bombed Iran, Energy Secretary Ed Miliband pledged to bring forward the next renewable auction. The justification was to reduce fossil fuel dependency, yet the last auction saw offshore wind clear at prices well above average wholesale costs. And that’s before you factor in all the system costs. Higher energy costs (expensive gas makes renewables more expensive to build), higher interest rates, and reduced competition from an accelerated timeframe make it likely that the next auction will be even more expensive.

It is remarkable how little scrutiny MPs have applied to the non-wholesale bits of our bills. Despite sky-high prices, there has been a tendency to treat bills as a magic money tree – a way of spending money without raising taxes. There might be a case for subsidising hydrogen or discounting bills for the least well-off, yet instead of raising taxes through our broadly progressive tax system the money is levied from our bills. It’s ironic that we apply a lower rate of VAT to energy to make our tax system more progressive– the poor spend a greater share of their income on energy than the rich– while simultaneously applying dozens of levies to bills to pay for everything from hydrogen and carbon capture to subsidies for poorer households and support for heavy industry.

The root of the problem is that we’ve completely failed to keep track of what policy is doing to the price of electricity, and even when we did we didn’t factor it into models forecasting electricity demand. It is a scandal. The figures on rising network and policy costs cited earlier come not from official forecasts but from independent analysis by energy analyst Ben James — work that fills a gap the government itself no longer attempts. This is not because the work wasn’t necessary. Without it, we are likely to repeat mistakes that have made British electricity some of the world’s most expensive.

The British state’s track record at forecasting electricity use is, to put it bluntly, crap. Yet forecasts matter. The response to bad forecasts shouldn’t be ditching them altogether, it should be better forecasts. To that end, three things should happen.