U.K. Due to Set Out Major Energy Investment Plan on Monday
(Bloomberg) -- The U.K. government’s long-awaited policy paper on energy will outline “major investments” in hydrogen, carbon capture and storage, and nuclear power as well as reforms for the retail supply market.
It’s due to be published on Monday, according to officials.
The white paper will target household energy suppliers like Centrica Plc and Electricite de France SA, and outline ways to get customers off the most expensive plans. The government is also set to test new reforms to encourage people to switch supplier when their contract ends.
The government has tried to stop energy retailers from overcharging customers who don’t shop around for the cheapest deal. The new measures would move beyond a price cap that’s already in place, to limit the amount suppliers can charge customers for the most expensive plans. The cap started in 2018 following a two-year investigation into competition in the energy market.
Energy companies shouldn’t be able to roll over contracts indefinitely or punish long-standing customers, according to an official. That’s why the government wants to make it easier for people to switch to cheaper rates.
The government will trial opt-in switching -- where consumers are offered a simple method of changing to a cheaper tariff if their initial contract has ended -- and opt-out switching, where, unless they choose not to be, consumers are automatically switched to a competitive new contract after the initial contract ends.
The second option, if adopted, would effectively outlaw so-called standard variable tariffs, which may in turn impact utility-company earnings.
“We want greater fairness and transparency in the energy market and this is an important step to getting there,” said Hayden Wood, co-founder and chief executive officer of Bulb Energy Ltd., an upstart renewable electricity energy company looking to build market share.
The white paper will build on points outlined in Boris Johnson’s 10-point green plan announced on Nov. 18, and add detail on how the nation plans to achieve net zero by 2050.
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