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UK energy bills could soar 'under new means testing' to pay for renewable energy
Reach Daily Express | August 1, 2025 5:39 AM CST

Wealthier households may be asked to shoulder higher energy bills to safeguard low-income consumers, as Ofgem announces a significant review of how it distributes the burden of escalating energy costs.

The regulator unveiled the review into pricing models on Wednesday, with the goal of altering the current system "to ensure fixed costs don't disproportionately affect vulnerable and low-income consumers".

It stated that investment is required as Britain broadens its renewable energy sources, which would enable the country to produce more of its own energy and insulate itself from global commodity shocks.

The regulator said this investment would eventually cut unit costs by reducing dependence on imported gas, but fixed costs might increase to fund improved infrastructure, the Times reported.

Jonathan Brearley, Ofgem's chief executive, commented: "This shift in the makeup of system costs means we need to review how we pay for energy and carefully consider how these costs are distributed.

"We know customers have real concerns about fairness and transparency in their bills, especially around fixed costs. That's why we're asking big questions about how and where these costs are shared - and whether there are better, fairer ways to do it.

"The launch of this review is the next step in developing fairer pricing for a changing energy system, ensuring more choice for consumers while protecting those most in need."

Speaking at an industry event earlier this year, Brearley said: "We want to at least ask the question whether or not we can allocate costs more progressively. What [the review] will mean is looking at the bill and saying, 'Are there ways in which we can attach the price customers pay for fixed costs to income?"

Ed Miliband, the energy secretary, has set a goal to eliminate fossil fuels from the UK's power network by 2030.

Ofgem noted that customers were also altering their energy usage, with electric vehicles and heat pumps increasing some households' energy consumption. Chris Norbury, head of E.ON UK, commented: "We welcome this review and the potential to reform standing charges.

Ofgem must also avoid the temptation to create a short-term solution that simply moves these costs between customer groups, overlooking the people who need the most help, and disproportionately helping others. The ideal outcome would be an end to standing charges. To achieve this, it's important to really understand what makes up these costs and then decide how best to allocate them."


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