Energy UK welcomes diluted price cap pledge

Targeted support for vulnerable customers is right, says trade body

“The energy industry stands ready to work with the next government to help deliver an energy system that works for everyone,” Energy UK’s chef executive has claimed.

Responding to the publication of the Conservative manifesto last week, Lawrence Slade welcomed wording which suggests the party’s threatened energy price cap will be limited to specific customer groups.

“Targeting support for vulnerable customers and making sure the market works fairly for everyone are the right priorities, and the industry is absolutely committed to working with government and the regulator to achieve this,” he said.

Prior to the publication of its manifesto, senior Conservative had suggested that price regulation in the domestic energy market would extend to 17 million consumers and result in a £100 annual saving per household.

The manifesto commitment was considerably softer however, pledging to “introduce a safeguard tariff cap that will extend the price protection currently in place for some vulnerable customers to more customers on the poorest value”.

For other consumers, the Conservatives will “maintain the competitive element of the retail energy market by supporting initiatives to make the switching process easier and more reliable”.

Energy UK’s relief at the toning down of threatened market interventions was reflected at many energy supply firms, though one big six executive told Utility Week they were concerned by the implications of plans to extend a price cap to microbusiness customers.

With regards to other energy commitments in the manifesto Energy UK urged a Conservative government to be swift in carrying out a promised review of energy costs in order to “provide policy clarity to the investment community”. It also pleaded for “an honest debate around the costs of decarbonisation, tackling fuel poverty, how to target support for the vulnerable and deliver security of supply – and how these are to be paid for.”
 
The trade body acknowledged a willingness in the manifesto to countenance onshore wind development in the Scottish isles, but said it would like to see a Conservative government look “wider and further” to open up onshore wind opportunities. Energy UK has previously lobbied for a change to Tory opposition of onshore wind development, pointing to its strong cost competitveness in comparison to other renewable technolgies.