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aftermath of Russia’s invasion of Ukraine, British households are still struggling with high energy bills because of outdated regulations pushing up costs.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’ by John Penrose, former Conservative MP and minister, Competition Tsar, leading an independent review of UK competition policy, and co-chair of the Commission for Carbon Competitiveness’ 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.
The paper 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)
