What would a price cap mean for the energy market?

What would a price cap mean for the energy market?

One of the key commitments in the Conservative Manifesto was to introduce a “safeguard tariff cap [on energy bills] that will protect customers who do not switch against abusive price rises”. This form of intervention marks a significant change in attitude to UK energy policy.

1000

Partner and Head of Power and Utilities

KPMG in the UK

Contact

Also on KPMG.com

What would a price cap mean for the energy market - image of several lightbulbs one is lit

The Queen’s Speech on 21 June confirmed that the Government would bring forward “measures to help tackle unfair practices in the energy market to help reduce energy bills.” The government also signalled it was still considering the best way to achieve this.

As the government considers its options, this discussion paper contemplates the potential implications of a price cap for the way the UK energy market works, and raises some major questions that boards in the energy sector need to consider such as: 

  • Would a price cap mean lower bills?
  • What would the implications be for switching?
  • How would the competitive landscape change?
  • How would consumer and investor confidence be affected?
  • What would the impact be on investment and innovation?

Read the full report: What would a price cap mean for the energy market.

Alternatively, our ‘Where next for retail price regulation?’ summary considers the other forms of intervention Ofgem could implement. 

Brexit: UK better off inside EU’s internal energy market

Brexit: UK better off inside EU’s internal energy market

Continued access to the IEM will help keep bills down and maintain security of supply.

Connect with us

 

Request for proposal

 

Submit

KPMG’s new-look website

KPMG has launched a state of the art digital platform that enhances your experience and provides improved access to our content and our people, whatever device you are on.

 
Read more