Homes and businesses have faced surges in the cost of their bills as the price we pay for energy has skyrocketed. Ofgem’s new, lower energy price cap, announced in August 2023, will allow many some relief. Due to a fall in the wholesale price of energy, the average household can now expect to save £151 this quarter, with the regulator passing cost savings onto consumers.
But this relief will only be short lived. Costs are predicted to rise again, with Ofgem’s next energy price cap, due in January, set to increase by 8%.
Here, Phil Thompson, CEO of Balance Power responds to the news about the price cap, touching on how accelerating the net zero transition can bring down bills – for good.
“Whilst this is a positive step, the fact remains that the new cap is still significantly higher than historic levels. As our energy system relies on fossil fuels, we’re tied to a global marketplace that’s vulnerable to external shocks, political tension and sky-high prices. The price cap is not the problem or the solution, just a measuring tool of this dark underbelly.
The yoyo-like nature of bills underscores how urgently we need to transition to a decarbonised energy system and create conditions favourable to home grown renewables. This is the only way to ensure energy security, increased stability in prices and a decrease in bills.
The current outlook leaves consumers worse off as fuel poverty continues to rear its ugly head each winter. Any further use of the Energy Price Guarantee only masks the immediate impact and leaves tax payers with a problem for a later date when these funds could be spent on other key public services.”
You can also find Phil Thompson’s reaction to Ofgem’s new price cap in The Independent.