Energy bills are still too high for many households. That’s why we need to make sure the transition to clean energy is not just fast - but fair.
Energy bills remain a deeply felt issue. Many still remember the sharp price spikes of 2022, and while prices have stabilised, they’re still higher than most would like. It’s only fair that people expect the transition to clean, homegrown energy to help bring costs down - and we agree.
With around 14,000 employees living and working across the UK and Ireland, we’re part of the communities we serve. We generate the energy that powers everyday life, and we share a common goal: to deliver secure, clean and affordable energy for every household and business in Great Britain.
The transition to a cleaner energy system offers a credible path to lower bills over time. It also brings wider benefits - economic growth, high-quality jobs, and stronger energy security. And as NESO’s recent advice to government made clear, this can be achieved without adding to consumer costs.
But to realise these benefits, we need to work together - Government, Ofgem and industry - with a clear and coordinated focus on making the costs of clean energy fair.
What needs to happen next?
1. Make clean energy costs fairer
The way we pay for energy today reflects the system we’re moving away from. Standing charges cover shared costs like the electricity networks, while unit rates cover the energy we use. But in a clean energy system powered by renewables, more costs are fixed and shared, and the additional cost to produce each unit of electricity becomes lower.
The response to Ofgem’s recent call for input on standing charges shows that customers want change. But simply shifting costs between standing charges and unit rates won’t solve the problem - it risks creating new winners and losers and could slow down electrification.
We believe it’s time to scrap the one-size-fits-all standing charge. In its place, we should introduce a progressive model - one that reflects ability to pay and how people use the system. This approach is already used in other countries and would better support a fair transition. Ofgem is exploring options, and we believe Government could accelerate this work by signalling its support for a fairer, more progressive standing charge.
2. Help customers benefit from clean energy
Electricity is more efficient than fossil fuels for heating and transport. But right now, policy costs added to electricity bills make it more expensive than gas.
Rebalancing these costs would give customers a clearer incentive to switch to electric heating and vehicles. For example, modelling by the Climate Change Committee shows that removing policy costs from electricity bills could save a typical household with a heat pump nearly £500 a year.
This isn’t simple - those costs need to be recovered somehow, and this is a discussion Government needs to grapple with urgently to enable consumers to realise this benefit. If they’re moved to gas, it could impact lower-income households who rely on gas heating. Assuming public finances cannot absorb these policy costs, another option might be to recover them as fixed costs in the standing charge, and the interaction of this issue with the fairness question above becomes apparent – the ability of the standing charge to absorb more costs depends on the standing charge being fairer.
3. Put inclusion at the heart of the transition
Too many households still live in energy poverty. And not everyone can afford to invest in heat pumps or electric vehicles at the same pace. That’s why we believe a safety net is essential.
Targeted support - like a social tariff - can help protect the most vulnerable and ensure everyone benefits from the transition. If we move to a fairer standing charge, fewer people will need this kind of support, making it more effective and sustainable.
We also welcome steps to protect industrial competitiveness, including the expansion of the Supercharger and the British Industrial Competitiveness Scheme (BICS).
The journey to a cleaner, more secure energy future is already under way - and we’re proud to be part of it. Now we need to make sure the system is set up to benefit everyone.
That means tackling how bills are structured, making clean energy costs fairer, and ensuring no one is left behind. These are practical steps we can take now to make the transition work for households, businesses and the country.