- REA responds to Ofgem announcement of energy price cap change;
- Ofgem has confirmed that the energy price cap will now be updated quarterly, rather than every six months;
- REA believes that, while suppliers may be given greater protections, consumers face a ‘devastating’ winter.
The Association for Renewable Energy and Clean Technology (REA) has responded to Ofgem’s confirmation that price cap levels will now be updated every three months instead of every six months, saying that while suppliers may be given greater protections, consumers face a ‘devastating’ winter.
The change has been made by Ofgem so that prices charged to bill-payers are a better reflection of current gas and electricity costs. The REA says that the measure will give greater protections to suppliers, ensuring that fluctuations in wholesale prices are matched by the price cap.
However, the REA cites major concerns about what impact this will have on consumers over the winter months, with large rises in the price cap now expected for both October and January.
The REA has long called on the Government to take substantive action, and believes that a great national effort over the coming months to help reduce the demand for gas – the main driver of the energy bill crisis – is imperative. The insulation of homes, switching people from gas onto renewable alternatives and decoupling power from wholesale gas are some measures proposed by the trade association.
Amy MacConnachie, Director of External Affairs at the Association for Renewable Energy and Clean Technology (REA), said:
“The theory behind Ofgem’s price cap announcements is understandable, but we do have major concerns about what impact this will have in reality.
“From a supplier point of view, this will give greater protections to ensure that fluctuations in wholesale prices are matched by the price cap. However, for consumers, this could be devastating – to face two price hikes over the winter months will hit many households and businesses incredibly hard.
“We have long urged the Government to take concrete action, but while small pots of cash relief have been offered, the fundamental problem hasn’t been tackled.
“Unless we see a great national effort over the coming months – insulating homes, getting people off gas and onto renewable alternatives, decoupling power from wholesale gas – this will be an incredibly bleak winter.”