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Green energy tariffs could be exempt from Ofgem price cap

26 February 2018
Biomass
energynomics

Green energy tariffs, where consumers opt to get their energy from renewable sources, could be exempt from the government’s cap on prices which will be introduced to parliament on Monday.

The government’s Domestic Gas and Electricity (Tariff Cap) Bill will put in place a requirement for Ofgem, the energy regulator, to cap the most expensive domestic energy tariffs until at least 2020. However, in a statement, the government said the bill would require Ofgem, to consult “on a potential exemption for green energy tariffs”, according to Financial Times.

Green energy tariffs can be more expensive but the government said these could be exempted from the cap if Ofgem “is satisfied that the tariff supports the production of renewable energy”.

The cap, which will require Ofgem to set an absolute cap on standard variable and default tariffs — which have no end date — will protect 11m households in England, Wales and Scotland, the government said on Monday.

The temporary cap on prices should be in place by next winter, at the end of this year. It will apply until the end of 2020, when Ofgem will recommend to government whether it should be extended on an annual basis of up to 2023.

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