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Jonathan Brearley, the regulator’s chief executive, said he was shocked by stories of the tough choices some consumers are making between ‘heating and eating’ after war in Ukraine drove up electricity and fuel prices. gas.

But he warned the energy industry cannot shield households from the ‘full impact’ of price hikes and said the only way to fix the problem was to switch to green energy sources faster. “cheaper” such as wind and solar.

Mr Brearley said he heard heartbreaking stories from consumers struggling with the cost of living, including a woman with a brain tumor who struggled to pay her energy bill.

“What was shocking was to hear that she feels more comfortable in the hospital where she can eat and be warm than at home,” he said during a speech in Glasgow.

He said Ofgem and energy companies must do “everything in our power to help customers” with rising costs.

But he argued that ultimately the only way to reduce Britain’s exposure to gas price volatility was to ‘focus on producing cheaper, cleaner electricity here at home’. we”.

Mr Brearley added: “For years, some have argued that it is impossible to switch to a low-carbon, renewable energy system while reducing costs for consumers.

“I must say that this argument no longer holds any weight – energy economics has fundamentally changed.

“Before the crisis, many forms of low-carbon production had already become cheaper than conventional production. With the volatility we are seeing in gasoline prices, the economic case is much stronger.

“In my view, the gas crisis and Russia’s invasion of Ukraine show us that we need to accelerate the transition to net zero.”

He said the energy industry “cannot claim that our actions can mitigate the full impact of future price increases”, but “the best way to protect customers from price shocks is to diversify and ‘move faster to a cheaper, cleaner and more resilient net zero future’. .

His comments came as National Grid, which operates Britain’s main gas and electricity networks, said it would hand over £200m of excess profit from interconnectors to Ofgem sooner than expected.

The money is the result of the ‘cap and floor’ mechanism, which limits the profits the company can make from the interconnections it operates between the UK and Europe. Excess profits above the cap are returned to Ofgem.

National Grid said the advance payment would help reduce the pressure on consumers’ energy bills.

Martin Young, energy analyst at Investec, said the impact of the £200m spread across all consumers was likely to be small, making it largely a symbolic gesture.

But he added: “We see this as a very constructive approach by National Grid, and every little bit counts.”

Ofgem said it was examining how the money could be returned to consumers.

John Pettigrew, Chief Executive of National Grid, said: “Although National Grid’s impact on customer bills is relatively small, we strive every day to keep our costs as low as possible.

“Given how difficult the current rise in overall energy costs are for people across the country, we want to play our part in helping lower consumer bills.”

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Source: www.telegraph.co.uk
This notice was published: 2022-05-12 05:00:00

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