Miliband failing to tackle sky-high energy bills in race to net zero, MPs warn

Telegraph

28-03-2025

Ed Miliband has been accused of failing to tackle sky-high energy bills and risking power shortages as he races to hit net zero.
A report from the Commons Public Accounts Committee (PAC) said the Energy Secretary's reviews of gas and electricity prices were taking too long – leaving consumers with bills so high that increasing numbers of people are now in debt to their suppliers.
UK electricity prices have rocketed to become the highest out of a group 25 major countries, MPs warned.
They urged Mr Miliband to accelerate the reviews of levies and taxes that artificially inflate the cost of energy, especially electricity.
Mr Miliband's department has spent three years reviewing the way energy prices are linked to the price of gas – even though wind is now the largest form of generation – prompting criticism of the slow pace of change. The review was started by the Conservatives.
'The UK had the highest electricity price out of 25 countries reporting both domestic and industrial electricity prices in 2023, (including taxes and levies) and electricity is currently four times more expensive than gas,' the report said.
'Despite repeated promises, the department has delayed taking action to rebalance energy prices by shifting the cost of environmental levies from electricity to gas.
'In addition, the department is reviewing how electricity prices are set for households so that they can benefit from cheaper rates if demand is low or when the weather means more energy is produced.
'But this review has been running for three years and remains on an uncertain timetable, meaning it is unclear when consumers will start to see the benefits through reductions to their bills.'
The PAC report said it was also concerned about power shortages and 'grid stability' meaning blackouts, linked to growing reliance on weather-dependent renewables like wind and solar.
'The department has more to do to convince Parliament that it has a robust plan for ensuring security of energy supply to meet increasing demand.
'Energy demand is set to rise from increasing numbers of electric vehicles and heat pumps, data processing centres, as well as the move to building homes.
'The stability of the energy grid might be affected by the department's plans to move towards cleaner power by 2030, because intermittent renewable energy from wind and solar vary according to the weather conditions. Intermittent energy sources will therefore need to be complemented by flexible and baseload power.'
The report follows the latest data on customer energy debts and arrears from energy regulator Ofgem showing these had risen to £3.8bn by last autumn – compared with about £1.5bn before the energy crisis.
This is driven mainly by a rise in electricity bill arrears, up from £1bn pre-crisis to £2.9bn now.
Electricity costs about four times as much as gas in terms of actual energy, partly because the basic price is supplemented by several extra taxes and levies.
This inflated price also acts as a powerful deterrent to the installation of heat pumps as an alternative to boilers.
The power consumed by heat pumps, and the cost of that power, means they are no cheaper than boilers even though they are far more efficient.
The criticisms come on the eve of another increase in prices. The Ofgem energy price cap is going up by 6pc to £1,849 per year for a typical household using gas and electricity if they pay by direct debit on April 1.
Each price cap change lasts for three months and the latest increase is driven by a mix of global factors of which the most important is simply that demand for energy rises during winter.
For the same reason, the cap is predicted to fall again for the next three-month period starting in July, with suppliers EDF predicting a 7pc decline from July, taking the price down to £1,724 and then minimal changes through the rest of the year.
However, bills are still far higher than before the energy crisis when the price cap for April to October 2021 was just £1,042. Industry experts say there is little prospect that prices will fall back to that level in the foreseeable future.
The coming price cap rise will also make it more expensive to charge electric vehicles.
Carmoola, a car finance lender, calculates that the average price to fully charge an electric vehicle at an at-home charger will increase from £14.91 to £16.21 from April 1.
On a national basis, it means EV drivers are set to collectively spend £35m a month – £2.84m more – from April onwards to charge their vehicles.
A Department for Energy Security and Net Zero spokesman said:'Our mission for clean power is the only way to protect UK bill payers from future price shocks.
'The 2022-23 energy crisis, which saw sky-high energy bills and put pressure on households and businesses across the country, was a product of our reliance on gas for heating and powering our homes. We will bring down bills for good by moving towards a clean, homegrown power system that we control.
'We are also rolling out support for consumers, including through proposals to expand the Warm Home Discount to almost 3m more households next winter, and allocating £1.8bn of funding to create warmer, more energy-efficient homes across England.'