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    'UK Householders, Industry Pay too Much': Helm


Dieter Helm's independent review into reducing costs in each element of the UK electricity supply chain has now been published.

by: William Powell

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'UK Householders, Industry Pay too Much': Helm

UK households and businesses are paying too much for their electricity, according to Dieter Helm's independent review into reducing costs in each element of the UK electricity supply chain.

The report published, October 25 by the government's Department for Business, Energy and Industrial Strategy (Beis), found that retail prices had not fallen fast enough to keep up with falling gas and coal prices, and this was because of legacy costs – such as feed-in tariffs, contracts for differences and renewables obligations – and market power, it said. The report recommends a universal carbon price within the UK; and a border price if the UK adopts such a price unilaterally. 

The standard variable tariff which the government wants to cap should be replaced by a default tariff, and the Ofgem's regulatory system for network operators rewarded companies too much relative to their achievements and that also contributed to higher costs, it said.

Commissioned in early August, the review follows the plan set out in July by government and British energy regulator Ofgem to upgrade the network to a smarter energy system, and the publication of draft legislation on an energy price cap to keep families’ energy bills as low as possible.

The review puts forward his proposals on how to reduce costs in the power system in the long-term whilst ensuring the UK meets its climate change targets and the government will "shortly be seeking the views of industry, academics, businesses and consumer groups" on it, Beis said.

The government remains committed to the ambitious agenda of cutting carbon emissions while driving economic growth, as set out in the Clean Growth Strategy, as well as other recent announcements.

Business and Energy Secretary Greg Clark said that homes and business depend upon reliable, affordable power and the government is ambitious in its plans to keep costs as low as possible for them over the coming decades. We are already taking significant steps to upgrade our energy infrastructure as part of the Industrial Strategy and have published draft legislation to cap poor value energy tariffs helping millions of consumers across Britain. I am grateful to Professor Helm for his forensic examination. We will now carefully consider his findings.”


William Powell