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SSE generator proposes plan to help pay household bills

UK energy group SSE says electricity companies can reduce dwindling energy costs for UK households by agreeing to sell some of their products at “much lower” fixed prices. “compared to current wholesale prices.

The FTSE 100 has admitted power companies can play a part in easing rising energy costs for homes, although it also joined the call for the government to “pretend” made in water energy prices by providing payments to suppliers so that they can avoid raising the UK’s large price limit.

Writing in the Financial Times, SSE CEO Alistair Phillips-Davies has proposed a voluntary scheme through which low-carbon power companies own existing assets, such as wind farms and factories. nuclear, can agree to a flat rate much lower than the prevailing wholesale electricity price for production that they have not committed to selling in advance.

Such fixed-price contracts could last 15 years, which should help close the “gap” until other longer-term plans to reduce electricity prices in the UK are established, Phillips-Davies said. For example, the government has set targets for low-cost low-carbon technologies, such as offshore wind, by 2030, as it seeks to reduce Britain’s reliance on expensive imported gas.

The radical proposal would help ease the heat for power companies that fear tax losses if they generate large profits while households face greatest pressure on their income in a generation, driven by the spiraling increase in energy costs. Oil and gas companies operating in UK waters are already subject to the new 25% wind tax.

An ally of Nadhim Zahawi, prime minister, who organized Urgent meeting with energy companies including SSE last week, said he was maintaining the prospect of a tax if the generators are said to be returning excess profits to shareholders.

Phillips-Davies’ intervention comes before Ofgem’s August 26 announcement of a new energy price cap, which sets bills for the vast majority of households. Current projections suggest the energy regulator will announce an increase to more than £3,600 a year for a typical household from 1 October from £1,971 currently.

Phillips-Davies said nuclear and renewable generators would pay the difference between the agreed fixed price and the current wholesale price back into a pot “which could then help pay off any debt.” Which created by limiting [household] price “.

SSE owns renewable energy production, such as wind farms, as well as the electricity grid and gas-fired power plants in the UK. It no longer sells electricity and gas directly to UK customers then sell its retail business to Ovo in 2020.

Recommend to repeat one mechanism proposed earlier this year by academics at the UK Energy Research Centre, who estimate that more than £300 could be paid off in household energy bills a year.

Most existing large-scale renewable energy projects still benefit from a legacy support program that pays generators a subsidy on top of current wholesale electricity prices, the scientists claim.

Phillips-Davies insists the government will still have to play the biggest role in helping families this winter, as he backed a proposed multibillion-pound loan scheme to help bring down domestic energy prices.

Scheme, first proposed by ScottishPower in April, gained support as concerns about rising energy bills. Phillips-Davies added that a loan program should be viewed as a “mortgage” rather than a “turn-around”.

“As with Covid emergency assistance, it will rely on a relatively cheap government loan, but with a plan to repay this debt as we complete the energy transition and prices come down,” he said. said more.

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