Recommendations & Conclusions
12 items
3
Conclusion
19th Report - Energy Bills Support
Accepted
The Department has not done enough to address the challenges of providing financial support to vulnerable consumers in the event of another crisis. The Department reported that between mid–2022 and mid–2023 the Energy Price Guarantee (EPG) and Energy Bills Support Scheme (EBSS) prevented around 289,000 households in England from going …
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The Department has not done enough to address the challenges of providing financial support to vulnerable consumers in the event of another crisis. The Department reported that between mid–2022 and mid–2023 the Energy Price Guarantee (EPG) and Energy Bills Support Scheme (EBSS) prevented around 289,000 households in England from going into fuel poverty. However, this was not enough to offset the wider impact of soaring energy prices, which still pushed an estimated 238,000 more households into fuel poverty overall. At the same time, take–up of the scheme supporting households without a domestic electricity supply, such as those in care homes and park homes, was low—only 18.2% in Great Britain and 19.1% in Northern Ireland (of the Department’s provisional estimate of eligible recipients). While the Department worked with local authorities on some schemes to identify vulnerable consumers, the low take–up suggests that this approach did not fully reach all those in need. The Department says it channelled funds via social landlords, but gaps in communication and data tracking meant some eligible tenants were still missed. The Warm Homes Discount, an existing support scheme that the Department expects will mitigate high energy prices this winter, excludes some groups who are more exposed to high energy costs like certain people with disabilities whose costs can be 25% higher than those without disabilities. recommendation The Department should, in time for next winter, develop strategies for providing financial support to consumers at greater risk of fuel poverty. These strategies should consider how to work with organisations with helpful insights, such as registered social landlords.
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Government response AI summary
The government has consulted on expanding the Warm Home Discount scheme, which is estimated to reach an additional 2.7 million households, and is considering options for better targeting of future bill support.
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HM Treasury
5
Recommendation
19th Report - Energy Bills Support
Accepted
We remain concerned that even after the crisis has subsided, UK electricity bills are the highest of the countries providing comparable data to the International Energy Agency. The UK had the highest electricity price out of 25 countries reporting both domestic and industrial electricity prices in 2023, (including taxes and …
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We remain concerned that even after the crisis has subsided, UK electricity bills are the highest of the countries providing comparable data to the International Energy Agency. The UK had the highest electricity price out of 25 countries reporting both domestic and industrial electricity prices in 2023, (including taxes and levies) and electricity is currently four–times more expensive than gas. Despite repeated promises, the Department has delayed taking action to rebalance energy prices by shifting the cost of environmental levies from electricity to gas. In addition, the Department is reviewing how electricity prices are set for households so that they can benefit from cheaper rates if demand is low or when the weather means more energy is produced. But this review has been running for three years and remains on an uncertain timetable, meaning it is unclear when consumers will start to see the benefits through reductions to their bills. recommendation a. The Department should set out a timetable for policy decisions to reduce electricity bills through its previous commitments to rebalance the costs of electricity and gas. b. The Department should set out a timetable for implementing the proposals for change it has identified from its review of electricity market arrangements. 5
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Government response AI summary
The government commits to publishing a decision on the Review of Electricity Market Arrangements (REMA) by mid-2025 and will provide the Committee with a timetable for implementing the proposals for change once decisions are made.
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HM Treasury
6
Recommendation
19th Report - Energy Bills Support
Accepted
The Department has more to do to convince Parliament that it has a robust plan for ensuring security of energy supply to meet increasing demand. The security of energy supply is the highest priority for the Department. Energy demand is set to rise from increasing numbers of electric vehicles and …
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The Department has more to do to convince Parliament that it has a robust plan for ensuring security of energy supply to meet increasing demand. The security of energy supply is the highest priority for the Department. Energy demand is set to rise from increasing numbers of electric vehicles and heat pumps, data processing centres, as well as the move to building homes. The stability of the energy grid might be affected by the Department’s plans to move towards cleaner power by 2030, because intermittent renewable energy from wind and solar vary according to the weather conditions. Intermittent energy sources will therefore need to be complemented by flexible and baseload power. Nuclear is an important low–carbon form of baseload generation but there are questions around the life and capacity of the existing plants and the time needed to get small modular nuclear reactors up and running. In January 2025, the National Energy Systems Operator issued a routine notification to energy providers to increase supply, after energy generation briefly fell below a margin set to make sure demand in the days ahead was met. It acknowledged, however, that there had been some speculation about the seriousness of the situation. The Department indicated that supply levels had been lower in the past and the system responded effectively to the potential supply issues. But such interventions are not cost free–this response cost £21 million. DESNZ needs to make sure its public reporting of such incidents meets the highest standards of transparency. recommendation a. The Department should set out in its Treasury Minute response how it will make sure there is capacity in the grid when there is low generation from renewable energy during periods of calm weather, including from wider technologies like nuclear. b. The Department should, in time for next winter, work with the National Energy Systems Operator to explore ways of improving reporting on energy supply issues and how they are handle
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Government response AI summary
The government and National Energy Systems Operator (NESO) have updated response and communications procedures, including building educational content and reframing communications, and the National Emergency Plan will be updated by DESNZ later in 2025.
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HM Treasury
1
Conclusion
19th Report - Energy Bills Support
Accepted
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Energy Security and Net Zero (the Department) on its work to provide financial support to consumers in the light of significant increases in their energy bills.1
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On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Energy Security and Net Zero (the Department) on its work to provide financial support to consumers in the light of significant increases in their energy bills.1
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Government response AI summary
The government will share overarching lessons learned reports and domestic/non-domestic evaluation reports with the Committee upon their publication in Q3 2025, and will write to the Committee within one month of publication to detail learnings for future energy crises.
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HM Treasury
7
Conclusion
19th Report - Energy Bills Support
Accepted
In designing the energy bills support schemes, the Department drew on lessons learned from support schemes during the pandemic, such as reducing opportunities for fraud by using information from energy suppliers to limit the need to apply for support and verify energy usage. It also worked with fraud experts in …
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In designing the energy bills support schemes, the Department drew on lessons learned from support schemes during the pandemic, such as reducing opportunities for fraud by using information from energy suppliers to limit the need to apply for support and verify energy usage. It also worked with fraud experts in government, including the Public Sector Fraud Authority. Fraud and error levels in the energy support schemes were lower than for other schemes implemented during the pandemic.12 The Department estimated a fraud and error rate of 0.7% of scheme payments, worth £291.8 million.13 This is compared to 11% for Bounce Back Loans and an estimate by the Public Sector Fraud Authority of government fraud and error levels ranging from 0.5% to 5%.14 5 C&AG’s Report, para 1.6 6 C&AG’s Report, para 10 7 Qq 16, 18 8 C&AG’s Report, para 1.3 9 Q 9 10 C&AG’s Report, para 9 11 C&AG’s Report, para 17 12 Q 34 13 C&AG’s Report, para 10 14 C&AG’s Report, para 10 8
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Government response AI summary
The government agrees with the committee's observation on lessons learned and commits to sharing overarching lessons learned reports and evaluations with the Committee by Q3 2025. DESNZ will also write to the Committee within one month of publication, outlining applicable learnings for future energy price …
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HM Treasury
9
Conclusion
19th Report - Energy Bills Support
Accepted
Despite it being nearly three years since the energy crisis, the Department has yet to complete all of these evaluations. However, it told us it would be relying on the findings it does have to inform any possible future interventions.17 An interim evaluation of the domestic schemes is delayed from …
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Despite it being nearly three years since the energy crisis, the Department has yet to complete all of these evaluations. However, it told us it would be relying on the findings it does have to inform any possible future interventions.17 An interim evaluation of the domestic schemes is delayed from the initial target of August 2024 to Spring 2025, while final evaluations of both the domestic and non–domestic schemes are delayed from spring 2025 to Summer 2025, partly due to the General Election in July 2024.18
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Government response AI summary
The government agrees with the (implied) recommendation, committing to completing and publishing the evaluations of the domestic and non-domestic Energy Affordability schemes by Q3 2025, and to writing to the Committee within one month of publication to outline key learnings.
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HM Treasury
11
Conclusion
19th Report - Energy Bills Support
Accepted
Most of the £44 billion of support was provided through schemes that were universal in nature, which means that some people who did not need the support still received it, affecting the schemes’ overall value for money.21 Written evidence we received from Octopus Energy, for example, said that while the …
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Most of the £44 billion of support was provided through schemes that were universal in nature, which means that some people who did not need the support still received it, affecting the schemes’ overall value for money.21 Written evidence we received from Octopus Energy, for example, said that while the decision to provide universal support was necessary for the Department to move at pace, it resulted in higher than necessary costs.22 The support provided also did not match the support that was needed, as lower–income households received the same level of support as higher– income households.23 The Department told us that there were advantages 15 Q 16; C&AG’s Report, para 3.3 16 Qq 12, 16 17 Q 20 18 Q 17; C&AG’s Report, para 3.3 19 Q 17 20 Q 9 21 Q 12; C&AG’s Report, para 12, 4.2 22 EBS0003 23 C&AG’s Report, para 12, 4.2 9 in having broad–based schemes, as the “sheer scale of the price rises” meant that the number of households affected was so high that a universal intervention was required.24 But the Department acknowledged that it had to accept the risk of ‘deadweight’ in the schemes in order to introduce the schemes quickly.25
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Government response AI summary
The government agrees with the committee's observation and commits to reviewing options for better targeting of future bill support beyond March 2026. It will also explore how better data use and sharing can improve the targeting of economic support and is leading a working group …
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HM Treasury
15
Conclusion
19th Report - Energy Bills Support
Accepted
The Department reported that from mid–2022 to mid–2023, the Energy Price Guarantee (EPG) and Energy Bills Support Scheme (EBSS) prevented around 289,000 households in England from going into fuel poverty.39 However, this was not enough to offset the wider impact of soaring energy prices, which still pushed an estimated 238,000 …
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The Department reported that from mid–2022 to mid–2023, the Energy Price Guarantee (EPG) and Energy Bills Support Scheme (EBSS) prevented around 289,000 households in England from going into fuel poverty.39 However, this was not enough to offset the wider impact of soaring energy prices, which still pushed an estimated 238,000 more households into fuel poverty overall.40
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Government response AI summary
The government agrees with the (implied) recommendation, committing to expanding eligibility for the Warm Home Discount scheme to support more fuel-poor households by December 2025 and actively considering options for better targeting of future energy bill support schemes.
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HM Treasury
24
Conclusion
19th Report - Energy Bills Support
Accepted
Analysis from the Office for Budget Responsibility concluded that the size of the government’s financial support for energy bills (relative to Gross Domestic Product) was one of the highest in Europe because of the UK’s reliance on natural gas.69 The Department highlighted to us the importance of its clean power …
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Analysis from the Office for Budget Responsibility concluded that the size of the government’s financial support for energy bills (relative to Gross Domestic Product) was one of the highest in Europe because of the UK’s reliance on natural gas.69 The Department highlighted to us the importance of its clean power mission in “getting us off the rollercoaster” of international fossil fuel markets and volatile prices.70 It told us the deployment of, for example, low carbon renewable electricity will reduce the UK’s reliance on gas.71
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Government response AI summary
The government secures electricity security via the Capacity Market (CM), assessing capacity annually and securing it in advance, while also addressing the variable nature of renewables by relying on unabated gas and working with the market to understand the capacity provided by nuclear. DESNZ and …
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HM Treasury
25
Conclusion
19th Report - Energy Bills Support
Accepted
The Department described energy security and the security of supply as its highest priority. We asked the Department what it thought about concerns, set out in a document published by Net Zero Watch called “Blackout Risk in the GB Grid”, that events such as certain weather conditions, or interruption to …
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The Department described energy security and the security of supply as its highest priority. We asked the Department what it thought about concerns, set out in a document published by Net Zero Watch called “Blackout Risk in the GB Grid”, that events such as certain weather conditions, or interruption to a few power stations, led to a situation in early January where the level of supply in the grid to meet energy demand fell to what it described as “worryingly low levels”; with a risk of “cutting off certain areas of electricity or even a blackout”.72 Indeed, on 8 January 2025, the National Energy Systems Operator (NESO) issued to energy providers an energy margin notice, one of a range of tools it uses to make sure there is a healthy margin between the demand for energy and the available supply.73 It cost NESO £21 million to achieve this (a similar intervention on 14 January 2022 cost £25 million).74 The Department assured us this was a “normal part” of the 66 Q 11; C&AG’s Report, para 4.14 67 Q 66 68 Q 54 69 C&AG’s Report, para 4.12 70 Q 9 71 Qq 9, 71 72 Q 5 73 Qq 5, 6, 8 74 National Energy Systems Operator, What happened with margins on 8 January?, 14 January 2025 15 system’s operation. It explained that such notices are “routine signals to the market about supply needing to be available”.75 It also told us that it “did not agree with the analysis” in the document from which we drew our concerns.76 NESO acknowledged, however, that there had been some speculation about the seriousness of the situation. In response, it published an article setting out the actions it took and shared the publicly available data that informed its actions.77
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Government response AI summary
The government secures electricity security via the Capacity Market (CM), assessing capacity annually and securing it in advance, while also addressing the variable nature of renewables by relying on unabated gas and working with the market to understand the capacity provided by nuclear. DESNZ and …
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HM Treasury
26
Conclusion
19th Report - Energy Bills Support
Accepted
Demand on the grid is likely to grow due to the increased demand for electric cars and heat pumps and a rising number of data processing centres, as well as the move to building more new homes.78 In addition, the Department also has plans to achieve a decarbonised, or clean, …
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Demand on the grid is likely to grow due to the increased demand for electric cars and heat pumps and a rising number of data processing centres, as well as the move to building more new homes.78 In addition, the Department also has plans to achieve a decarbonised, or clean, energy system by 2030, which might impact on the stability of the grid because of the increased reliance on intermittent renewable sources of energy, such as wind and solar power. The Department recognised that it needs to make sure that, across the grid, it has sufficient flexible generation to accommodate variations in supply from intermittent renewables which vary according to weather conditions. It also noted the need to ensure that the grid can sustain a consistent pace of operation.79
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Government response AI summary
The Capacity Market (CM) is the department’s primary mechanism to ensure supply meets demand and delivers electricity security, and the department is focused on maintaining existing flexible capacity to ensure security of supply.
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HM Treasury
27
Conclusion
19th Report - Energy Bills Support
Accepted
In December 2024, the government published its pathway to a clean power system by 2030.80 We asked the Department what part it expects nuclear to play in the mix of low–carbon energy.81 Given the timescales involved to build new nuclear infrastructure versus ambitions for clean power by 2030, the government’s …
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In December 2024, the government published its pathway to a clean power system by 2030.80 We asked the Department what part it expects nuclear to play in the mix of low–carbon energy.81 Given the timescales involved to build new nuclear infrastructure versus ambitions for clean power by 2030, the government’s focus is mainly on existing nuclear plants.82 The Department said, however, there are questions around the exact life of the remaining nuclear plants in this country.83 Looking to what comes next, the Department told us that there will be more sites for nuclear power stations, particularly small modular nuclear reactors, a “new technology” for which Great British Nuclear is running a competition, concluding by spring 2025.84
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Government response AI summary
The government agrees with the observation and states it is implementing changes to Capacity Market auctions by June 2025. These changes aim to support investment in ageing plants by offering three-year agreements and introduce pathways for unabated gas plants to convert to carbon capture and …
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HM Treasury