Energy UK has warned that urgent action is needed to bring down energy bills in line with Government targets and splitting policy costs from electricity bills.

The report, How to Cut Bills: A crisis that can’t be ignored, sets out a pathway to achieving significant bill reductions this Parliament, including the reduction of reliance on international gas prices as the only long-term solution. It notes that, as things stand, the Government has not yet set out a plan of action to reduce household energy bills by £300 by 2030 as it has promised.

Although bills have fallen from that peak, they remain 34 per cent higher than before the crisis and customer debt stands at a record near £4bn. Whilst clean power should ensure lower energy bills in the next decade, the effect is unlikely to be meaningfully felt by 2030.

Energy UK is calling for a national strategy on energy bills to drive change and suggests accelerating critical network connections (which is likely to happen) and changes to the Contracts for Difference scheme. The biggest possible bill reductions will come from removing policy costs from electricity bills.

Moving policy costs from electricity to gas, and funding a small amount through general taxation, could lead to bill reductions of up to £400 a year for homes with electric heating, while guaranteeing that no households see an increase in costs. Additionally with electricity no longer artificially expensive, there will be far more incentive for customers to switch to EVs and heat pumps.

---