April Energy Price Cap - smoke and mirrors

The news today is that the British public are being rewarded with a cost of living reduction by Ofgem reducing the price cap by £117 from April.

Wind the clock back to November 2025 and Rachel promised to remove £150 of "green taxes" from our bill from April.

So how come a £150 reduction has now become just £117? Where has the £33 per household gone?

Well the excuse is that network costs have increased.

Energy prices have come down by £38 per year but network costs have increased by £66 per year.

So that's an overall increase of £28 yet it should be £33. The reduction should be £122 not £117.  Where has the £5 gone? Who is getting that?

The network costs have gone up due to the RIIO-3 price control framework.

The reason is that  we are paying for £28.1 BILLION to upgrade the transmission network through our bills- that's needed because the old model was we have a few power stations and now we have wind turbines, solar panels etc distributed everywhere.  The old grid is the wrong shape.

So the bad news is our bills will go up.  The subsidy is expected to increase to £108 per household by 2031.  I suspect however when all the spending and upgrading is complete, we will still be paying the capital subsidy...

All of this capital spend is being driven by Net Zero (Red Milliband) and Ofgem.  Having just watched Dirty Business on Channel 4 I am now questioning whether Ofgem is competent.  It's clear the Environment Agency was not a competent regulator.



 

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