"Wholesale energy prices have fallen in recent months, and we're investing in our network to safeguard the future energy system. The main driver of today's reduction is the change to policy costs announced by the Chancellor in the budget. Our focus at Ofgem remains on bearing down on the costs within our control, and unlocking the investment needed to support the transition to a more stable energy system over the longer term."
"Energy consultancy Cornwall Insight estimated that removing green subsidies would lower the cap by about £145 a year, once VAT and Ofgem's internal pricing allowances were factored in. Higher infrastructure costs have partly offset the savings. Ofgem said network charges increased by £66, largely due to investment in upgrading electricity and gas grids, which is essential for a more reliable and sustainable energy system."
The energy price cap will decrease by £117 annually (7%) starting April 1, reducing typical household bills from £1,758 to £1,641. This reduction results primarily from the government's removal of green energy subsidies, particularly the Energy Company Obligation scheme. However, the actual savings fall short of the £150 annual reduction promised by the Chancellor in November. While removing green subsidies contributes approximately £145 in savings, higher infrastructure costs have partially offset these gains. Network charges increased by £66 due to essential investments in upgrading electricity and gas grids to modernize the system, improve reliability, and support the transition to lower-carbon energy.
#energy-price-cap #green-energy-subsidies #household-bills #infrastructure-investment #energy-policy
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