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industry & Government news

DIGEST ILYAS TAYFUN SALCI / SHUTTERSTOCK.COM emphasise that the primary cause of the
increased cap is a “record rise in global
gas prices over the past six months”.
“We know this rise will be extremely
worrying for many people, especially
those who are struggling to make ends
meet, and Ofgem will ensure energy
companies support their customers
in any way they can,” said Ofgem boss
Jonathan Brearley, confirming that the
ombudsman will announce specific
new customer support schemes.
It is worth noting that Ofgem is
expected to increase the price cap
further ahead of winter 2022/2023.
Utility Week, edie’s sister title, is
reporting that the average UK home
could see gas and electricity bills rise
to £2,448 per year once this further
increase is completed, based on current
forecasts for wholesale gas prices.
Ofgem is also planning to gain powers
to update the price cap more regularly;
at present, the updates can only be
made every six months.
The measures he unveiled are the
culmination of weeks of talks between
the Treasury, 10 Downing Street and the
Department for Business, Energy and
Industrial Strategy (BEIS).
Chancellor Rishi Sunak has
announced a multi-billion-pound
package for a “rebate and clawback
scheme”. Under the scheme, the
Treasury will underwrite loans to
CHANCELLOR RISHI SUNAK’S SCHEME WILL
REQUIRE HOUSEHOLDS TO PAY BACK THE energy suppliers, who will be required
MONEY OVER A FIVE-YEAR PERIOD. to use them to provide a rebate on
domestic energy bills.
This approach, Sunak stated, should
shave £200 off the average home’s
TREASURY’S REBATE SCHEME annual dual-fuel bill, increasing to up to
ATTEMPTS TO TACKLE COST £500 for the lowest-income homes. The
discount will be applied in October.
A government spokesperson said
OF LIVING CRISIS the Treasury will, in total, set aside
£12 billion for the scheme over this
financial year and the next financial
year. At least £6 billion will be allocated
ENERGY REGULATOR OFGEM has to 29 UK-based energy suppliers ceasing in this financial year.
announced a new energy price cap trading over the past 12 months. The government is planning to
for average gas and electricity bills, Ofgem reported a rise in the average recoup the money from the scheme by
meaning the average home will see price of gas per therm from 49p at the requiring households to pay back the
dual-fuel bills rise above £1,900. start of January 2021 to 112.5p at the £200 over a five-year period.
In recent months, there have been fresh end of November 2021. Within the To accompany the “rebate and
calls for government-level focus on energy same timeframe, electricity prices per clawback” scheme, Sunak announced
efficiency and renewables to decrease the megawatt-hour increased from 53p to an extension to the Warm Homes
nation’s reliance on imported gas. 112.5p. Prices have continued to rise, Discount scheme, which, at present,
The current price cap has, so far, with warnings that policy inaction enables low-income homes and those
served to protect millions of consumers could lead to increased prices through claiming pension credits to claim £140
from rapidly increasing gas prices to the end of the decade. off their electricity bills each winter.
– largely caused by discrepancies As such, Ofgem has announced an The extension will widen the
between demand and supply globally, increase to the price cap from April, eligibility criteria and increase the
including Russia decreasing its exports, raising the amount by 54 per cent to one-off payment. Sunak has said that
according to sustainability website edie. £1,971. The changes will affect 22 the number of homes eligible for the
However, the fact that prices have not million homes. scheme should increase by a third as a
been passed onto the consumer has led The regulator has been keen to result of the changes.

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24/02/2022 10:36
News.indd 1
News.indd 1 24/02/2022 10:36