Source · Select Committees · Public Accounts Committee
Recommendation 19
19
Rejected
Department exploring fundamental electricity market reform to reduce long-term consumer costs
Conclusion
The Department is also currently considering fundamental market reform of how electricity is bought and sold, through which it hopes to reduce costs of electricity to consumers over the long term. The Department expects reform of the retail market to result in more scope for suppliers to offer flexible tariffs, for their customers to benefit from cheaper electricity when demand is lower.60 Reducing electricity demand through energy efficiency and consumer behaviour
Government Response Summary
The government rejects the committee's observation, stating its focus is on consumer security by reducing and affording bills, and explaining its approach to policy interventions, cost impacts, and monitoring energy prices.
Government Response
Rejected
HM Government
Rejected
5.1 The government disagrees with the Committee’s recommendation. 5.2 The department is focused on consumer security by bringing bills down, keeping them affordable. The government took steps to shield consumers and companies from the worst effects of the rise in global energy prices, paying around half a typical household’s bill over winter 2022-23 and half the wholesale energy costs paid by some businesses. 5.3 In March 2023, the Secretary of State noted that access to cheap, abundant and reliable energy provide the foundation stone of a thriving economy, with homes and businesses relying on it to deliver our future prosperity. Following the unprecedented cost of living support that winter, the Secretary of State noted that Powering Up Britain sets out how the government will fix this problem in the long term to deliver wholesale electricity prices that rank amongst the cheapest in Europe. 5.4 A decarbonised power sector is a key step on the path to a low-cost, clean energy system by 2050. The impact of policy interventions on prices and bills is therefore a key factor in making decisions. 5.5 Future costs are naturally subject to uncertainty, and the extent to which costs impact bill payers and taxpayers will depend on future policy decisions, as well as on factors such as the development of flexible and low-carbon generation technologies, and the evolution of global power markets. 5.6 The government currently publishes information on cost impacts and estimates for specific policy interventions in Impact Assessments, and monitors energy prices, publishing regular updates via the series of Quarterly Energy Prices reports.