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White Paper majors on fairness and affordability

Nick Palmer Senior Writer

December saw the release of the long-awaited, several times delayed Energy White Paper (EWP). In this 'Chart of the week', we consider the changes the EWP has in mind for the retail market and its governance. Figure 1 is featured in the EWP highlighting one of the government’s priorities. The average household’s dual fuel energy bill in 2019 was similar to 2010. However, as the government highlights, the underlying costs have changed. Over the past decade, electricity prices have gone up, because of rises in policy and network costs, while gas prices have fluctuated, reflecting movements in the wholesale gas price. However, consumers have used less energy, which has balanced out the cost increase. Looking forward, over the next ten years, increases in network costs, along with funding for clean energy and supporting vulnerable households, could push gas and electricity prices up, the government said. Based on the policies in the EWP, the government estimates that household dual fuel bills will be, on average, broadly similar in both 2025 and 2030 to 2019. In terms of policy priorities, the EWP leads with the retail market, which articulates a vision of fairness, and sets out actions for spring 2021 to implement that vision, including: Using data from smart meters to “create opportunities” for consumers to save money by “using energy when it is cheaper”. The EWP recommits Ofgem to a final decision in next Spring on “how and when to implement half hourly settlement”. By April 2021, BEIS will ...

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