Ofgem Sets Price Controls for Energy
Ofgem has placed price controls on electricity distribution networks to ensure that money spent on renewable energy does not become a burden to the consumer.
The owners of all seven networks that distribute electricity to homes and businesses nationally, have agreed to the price controls set. This will raise energy bills for the UK households by an average of £4.30 year-on-year.
In December the consumer group Which? Said that gas and electricity bills for households might increase by 35 per cent by the year 2020, due to various factors, including investment in renewable energy.
Investment in renewable energy technology and large scale trials of smart grids is expected to reach £7.2 billion in the next five years.
Ofgem spokesman, Steve Smith, said: “We have set a tough but fair price control for the companies so they can invest to maintain high performance and adapt their networks to the low-carbon economy. The package will be delivered at a fair price to consumers who will benefit from improved service.”
The price controls are part of a price control package which focuses on sustainable development of the energy sector.