UK Business Secretary Kwasi Kwarteng plans to rein in the “crazy” profits of renewables firms, the Telegraph reported, as average household energy bills are forecast to top £6,000 next year.
(Bloomberg) — UK Business Secretary Kwasi Kwarteng plans to rein in the “crazy” profits of renewables firms, the Telegraph reported, as average household energy bills are forecast to top £6,000 next year.
The expected intervention is an attempt to head off criticism that the government has failed to come up with policies to resolve what’s set to be the nation’s biggest cost-of-living crisis in decades. In a separate article in the Mail on Sunday, Kwarteng wrote that he wanted to “reassure the British people that help is coming.”
Kwarteng, an ally of leadership front-runner Liz Truss, is expected to offer companies that signed contracts between 2002 and 2013 a fixed-term rate at which to sell energy to suppliers for 15 years if they agree to stop selling cheap renewables at high wholesale prices, according to an advance edition of the Sunday Telegraph.
If companies decline the offer to switch, some will remain on the variable-rate contracts until 2037, but such a deal would “help with financial planning and investment decisions” in the long run, while pressuring prices lower, the Telegraph reported, citing government sources.
Ofgem will announce the new upper limit at which UK suppliers can charge for household energy in October. The average bill will probably be nearly £3,600, according to consultancy Auxilione, which estimated the price cap could top £6,000 in April — triple the current rate and a level that would push millions of Britons into fuel poverty.