Ofgem has said energy firms need to take the public with them to build a greener future for the nation as the regulator prepares to set out tough new price controls for network operators this week.
Chief Executive, Jonathan Brearley said huge investment was needed to enable more renewables and greater electric vehicle use, but that in an economic downturn it was even more important to ensure consumers pay the lowest cost possible.
In an article in The Times, Brearley said network companies will have to reduce their ongoing costs significantly and accept much lower returns. But he said the proposed settlement will open up the energy system to global investment so it can deliver a low-carbon future for the country.
He said that under the current price control settlement consumers have paid more than they should have, partly because returns have been too high.
“By accepting a more balanced settlement this time round, they can help maintain the public support needed to meet the country’s climate goals — and secure their role in delivering them."
He urged the industry to apply the “same collective spirit” that has characterised the response to Covid-19 to help get Britain building and to protect consumers from climate change.
Brearley said the wider energy industry also has an opportunity to build public trust which it will benefit from as customers are more likely to buy new products and services such as smart chargers that cut the costs of charging electric vehicles.
The proposed price control settlement, which takes effect in April next year, will go out to public consultation before a final decision in December.