The plan will ease the burden of the Government's energy price guarantee - but there are fears that the step will lessen the incentives for companies to produce electricity from green sources
Due to the energy price guarantee, which sees the Government heavily subsidise energy bills over the next two years, the main savings from the limit will be made by the state, reducing the amount it must pay suppliers.
If the limit did continue to be applied past autumn 2024, it would directly push down household bills by keeping theMinisters have resisted political pressure for an expanded windfall tax that would be applied to the profits of electricity generators, but Labour claimed the new scheme would end up having a similar effect., said: “The Government has finally accepted the principle of Labour’s call for a windfall tax on excess profits of electricity generators.
Mr Rees-Mogg said: “We have been working with low-carbon generators to find a solution that will ensure consumers are not paying significantly more for electricity generated from renewables and nuclear. “That is why we have stepped in today with exceptional powers that will not only ensure vital support reaches households and businesses this winter but will transform the United Kingdom into a nation that offers secure, affordable and fairly-priced home-grown energy for all.”
The Energy Prices Bill will also contain clauses to ensure that the existing state support for bills, including a £400 discount for each household,At the moment, all forms of electricity cost the same as the most expensive form, which comes from natural gas. Suppliers pay the same wholesale price to generating companies no matter how the electricity was produced. The Government now wants to impose a limit on the price generators can charge for renewable power.
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