Energy regulator Ofgem plans £20 cut to customers’ bills
Households could see their energy bills cut by £20 a year under proposals put forward by the industry regulator, Ofgem.
Under the plans, Ofgem wants energy firms to cut their return on investments and spend £25bn in the next five years to invest in greener energy.
Ofgem said it was working “to deliver a greener, fairer energy system for consumers”. However, the plans were criticised by energy companies.
In order to reduce the cost to consumers, Ofgem says, the return energy firms will be allowed to make from their investments will be nearly halved.
In a statement, National Grid said: “We are extremely disappointed with this draft determination which risks undermining the process established by Ofgem.
“This proposal leaves us concerned as to our ability to deliver resilient and reliable networks, and jeopardises the delivery of the energy transition and the green recovery.”
But Ofgem says investing in the energy network of the UK is low-risk and should be an attractive option to investors.
“Strong evidence from water regulation and Ofgem’s offshore transmission regime shows that investors will accept lower returns and continue to invest robustly in the sector,” Ofgem said.