- British energy bills are inflated with extra costs imposed by clunky old rules about how power is generated, regulated, traded, stored and transmitted
- With modernisation, energy bills could be cheaper, subsidies could be lower, British manufacturing could be more competitive, and the country would be on a much cheaper path to Net Zero
- A new report by John Penrose – former Conservative minister, co-chair of the Commission for Carbon Competitiveness and author of an independent review of UK competition policy – makes twenty recommendations which would cut energy bills and put us on the most efficient path to Net Zero
- The recommendations could all be implemented without increasing the cost to the taxpayer or billpayer, and could boost productivity and growth by supporting British manufacturing
- ‘A Cheaper Route to Net Zero’ complements the new government’s search for ideas on how to decarbonise the electricity system by 2030
According to a new report, despite international gas prices coming back down in the aftermath of Russia’s invasion of Ukraine, British households are still struggling with high energy bills because of outdated regulations pushing up costs.
‘A Cheaper Route to Net Zero’ is written by John Penrose and published by the Centre for Policy Studies. Penrose is a former Conservative MP and minister, Competition Tsar, leading an independent review of UK competition policy, and co-chair of the Commission for Carbon Competitiveness’.
His report argues that the current system is hostage to the volatile international price of gas, to our detriment, and that regulations dictating how energy firms should behave have become steadily more complicated, detailed, expensive and slow – adding to the cost of energy.
‘A Cheaper Route to Net Zero’ sets out twenty recommendations which could be adopted by the new government to help bring energy bills down while still committing to decarbonisation.
The recommendations are broadly summarised as:
- Uncoupling energy bills from the price of gas
- Addressing the intermittency of renewable energy in the most cost-effective way
- Slashing the cost of energy transmission with measures like ‘local discounting’ for customers who agree to pylons or onshore wind turbines being built near them
- Cutting red tape and strengthening Ofgem’s commitment to competition
- Reforming the Energy Price Cap
- Levelling the playing field for UK manufacturers, including through the introduction of a Carbon Border Adjustment Mechanism (CBAM)
John Penrose, the report’s author, said:
‘Families and businesses are facing enormous energy bills that are much higher than they should be, because of clunky old rules about how power is generated, regulated, traded, stored and transmitted. There is plenty of debate over cuts to the Winter Fuel Payment but not enough of a conversation about how to lower bills across the board.
‘Ed Miliband recently asked the director of National Grid ESO for ideas on how to decarbonise the electricity system, and this paper gives him 20 low-cost, no-regrets answers to his question.
‘Without these ideas, Net Zero will cost billions of pounds more than it needs to, handing huge bills to British households and crippling UK manufacturing at the same time. But if we decarbonise in the right way, our energy can be both greener and cheaper.’
ENDS
NOTES TO EDITORS
- John Penrose served as Conservative MP for Weston-Super-Mare from 2005 to 2024, is co-chair of the Commission for Carbon Competitiveness, and was the author of an independent review of UK competition policy
- ‘A Cheaper Route to Net Zero’ is available under embargo here
- For further information, please contact Emma Revell on 07931 698246 and [email protected]
- The Centre for Policy Studies is one of the oldest and most influential think tanks in Westminster. With a focus on taxation, economic growth, business, welfare, housing and green growth, its goal is to develop policies that widen enterprise, ownership and opportunity
Date Added: Thursday 26th September 2024
