U.K. to Conduct Electricity Survey After Centrica Price HikeBy and
Review will identify ways to keep costs ‘as low as possible’
British Gas unit was last of ‘big six’ to raise energy costs
The U.K. government will review ways to bring down electricity prices for households and businesses to levels lower than the rest of Europe after Britain’s biggest power and gas supplier said it would raise costs for the first time in almost four years.
The independent review, led by a one-time adviser to former Prime Minister Tony Blair, will look at the entire electricity supply chain -- from generation to end-user -- to identify ways to keep energy prices “as low as possible,” Business and Energy Secretary Greg Clark said in a statement Sunday. The findings will be released at the end of October.
The government action follows Centrica Plc’s announcement on Tuesday that it would raise prices for 3.1 million customers by 12.5 percent next month. Price controls meant its British Gas unit had been “selling electricity at a loss” over the past year, Chief Executive Officer Iain Conn said. The company was the only one of the “big six” U.K. household energy suppliers to have kept prices stable over the last 12 months.
“The government is upgrading our energy system to make it fit for the future,” Clark said in the statement. “The review will consider how we can take advantage of changes to our power system and new technologies to ensure clean, secure and affordable supplies over the coming decades.”
University of Oxford professor Dieter Helm will lead the review. It follows similar efforts made by the government as part of its Industrial Strategy, including a request for regulator Ofgem to propose ways to extend existing price protections for consumers paying the lowest rates.
The survey will include the U.K.’s energy industry, government and regulators and consider the rising demand for electricity from the growing use of electric cars, robotics and artificial intelligence.
“We welcome greater transparency over the cost of energy,” Lawrence Slade, head of trade group Energy UK, said in an emailed statement. “We must ensure we deliver an industrial strategy based on a low-carbon economy and where the billions of investment needed can be delivered competitively via a range of technologies at the lowest cost to consumers.”