Tuesday 11 October 2022

Government unveils new powers to cut link between electricity and gas prices

The government has today unveiled new legislation to protect homes and businesses against volatile energy prices.

The Energy Prices Bill, introduced in Parliament today, provides the legislative footing needed to ensure that people and businesses across the UK receive support through the Energy Price Guarantee for domestic consumers and Energy Bill Relief Scheme for businesses.

The new bill also introduces new powers to stop high gas prices from dictating the cost of electricity produced by renewables.

This will be done through a temporary "Cost-Plus Revenue Limit" in England and Wales - a revenue limit will be introduced to curb the amount generators can make.

The government has said the details of how this is going to work would be subject to a consultation that will be launched soon.

Business Secretary Jacob Rees-Mogg said: "Businesses and consumers across the UK should pay a fair price for energy. With prices spiralling as a result of Putin's abhorrent invasion of Ukraine, the government is taking swift and decisive action.

"We have been working with low carbon generators to find a solution that will ensure consumers are not paying significantly more for electricity generated from renewables and nuclear."

Chancellor Kwasi Kwarteng said: "Our actions will mean that energy bills for the typical household will be half what they would have been this winter.

"We are protecting people, holding down inflation and preventing Putin's energy price hike from causing long-term harm to our economy by supporting businesses."