Cost of energy to be reviewed
The review will be undertaken by leading energy expert, professor Dieter Helm, who will recommend ways to keep energy prices as low as possible.
Helm said the review will “sort out the facts from the myths about the cost of energy”, and it will look at how the energy industry, government and regulators can keep the cost of electricity as low as possible, while ensuring the UK meets its domestic and international climate targets.
The professor added the review will look at each part of the electricity supply chain, from generation, to transmission, to distribution and supply, finding opportunities to reduce costs in each element.
He said: “The cost of energy always matters to households and companies, and especially now in these exceptional times, with huge investment requirements to meet the decarbonisation and security challenges ahead over the next decade and beyond. Digitalisation, electric transport and smart and decentralised systems offer great opportunities. It is imperative to do all this efficiently, to minimise the burdens. Making people and companies pay excessively for policy and market inefficiencies risks undermining the objectives themselves.”
The announcement by Business and Energy Secretary, Greg Clark, comes days after British Gas announced three million customers would face electricity price hikes of 12.5% from mid-September.
It also builds on the government’s action in the industry after asking the energy regulator, Ofgem, to come forward with proposals to extend the price protection currently in place for some vulnerable users to more people on poor value tariffs. It also follows on the price cap for four million pre-payment meter customers which came into force in April this year.
Clark said: “All homes and businesses rely on an affordable and secure energy supply and the government is upgrading our energy system to make it fit for the future. We want to ensure we continue to find the opportunities to keep energy costs as low as possible, while meeting our climate change targets, as part of the Industrial Strategy. The review will consider how we can take advantage of changes to our power system and new technologies to ensure clean, secure and affordable supplies over the coming decades.”
‘Cold comfort to the millions overpaying their energy’
Alex Neill, Which? managing director of home products and services, said: “It is right to look at how to keep costs down, but yet another review is going to be cold comfort to the millions overpaying on their energy bills right now.
“Consumers need to see urgent action from the government and regulator to tackle the lack of competition in the market and to ensure they are getting a good deal.”