A proposal from energy regulator, Ofgem, to ‘re-wire’ the energy system could save consumers up to £45 per year on their energy bills from 2021.
The savings would come as a result of Ofgem setting the limit on how much of their profits energy networks can give to shareholders to 4% – a drop of around 50%.
This equates to total annual savings of around £6.5 billion, meaning that households could see their energy bills drop by £45 per year.
As well as this, Ofgem are pushing for a ‘smarter, fairer and cleaner’ energy system by giving all consumers the opportunity to benefit from the latest technology such as renewables and electric vehicles at a lower cost.
Ofgem Executive Director for Systems and Networks, Jonathan Brearley said: “Our proposals for the new network price controls and charging reforms will help build a lower cost, fairer energy system which is fit for this smarter, cleaner future.
“We want to cut the cost to consumers for accommodating electric vehicles, renewables and electricity storage, and make sure that all consumers benefit from these technologies.
“This will mean driving a harder bargain with network companies to ensure that households who need it always have access to safe and secure energy at a fair price.”
Response to the News
The response to the announcement has been split, with National Grid stating their disappointment while Citizens Advice Chief Executive, Gillian Guy, said the opposite:
“Energy network companies have had it too good for too long. Ofgem’s commitment to a tougher price control should curb the excess profits networks have been allowed to make.
“This is good news for people as this should result in lower bills.”