Net zero costs to hit poorest households hardest, warns Ofgem
By Paul Homewood
h/t Ian Magness
The costs of hitting net zero could hit the poorest households hardest, regulator Ofgem has warned, as it launched a consultation into affordability across the energy market.
Ofgem raised concerns on Monday about how energy bills are being used to shoulder the cost of going green, particularly as the Government ramps up the roll-out of renewables such as wind and solar.
In a statement on Monday, Ofgem said the short-term costs of net zero “could disproportionately hit lower-income consumers” who are unable to invest in new technologies or change their behaviour.
Fears over the cost of net zero falling disproportionately on lower-income households come amid warnings that customer debts have increased by 50pc in the last year to £3bn.
Ofgem said that it remained “very concerned that struggling households have a limited ability to cope with future price shocks”.
It said: “The cost of recovering bad debts, and the high number of consumers who are locked into debt and repayment plans, could have serious consequences for the retail energy sector”.
Financial challenges had led to customers choosing to ration their energy usage, Ofgem said, which has created “harms associated with living in a cold, damp home” and fuelling mental illness.
They might have also added the crippling costs of heat pumps and EVs.
Anybody with half a braincell could have forecast all of this years ago. A much bigger proportion of poorer households’ incomes goes on basics, such as energy, than richer ones, who also benefit from generous subsidies for solar panels and Teslas.
Quite why OFGEM have left it so long to realise this is a mystery.
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NOT A LOT OF PEOPLE KNOW THAT 
It’s a bit rich of Ofgem, given their new role of forcing net zero on consumers – the eco warriors in suits have enabled supplier profiteering, immoral smart meter remote switching to higher tariffs and impoverishing renewables subsidies, levies, CfDs and constraint payment, all rinsing consumers
Ofgem needs replacing with a proper regulator, whose primary tasks are to protect consumers and ensure grid & network operators are keeping services in tip top condition – net zero should be no where near their control sticks
Which suppliers have “profiteered”?
Oil and gas companies are price-takers. Ofgem was a decent regulator but its priorities were changed, from consumer to Net Zero.
The Net Zero insanity has hit everybody .Households get a price limit subsidy for energy , but businesses have been hit very hard by the huge price increases .https://www.bbc.co.uk/news/uk-wales-62727373
Even the BBC admits the costs have gone up by 300% ,[or more].
But they seem more worried about certain types of shopkeepers .
Hundreds of small businesses , pubs etc , are closing because of energy costs , and large companies are putting up prices or moving abroad .
We simply pay for the subsidy via taxation. Even if you are a net recipient of public services, you lose because tax is spent on higher energy bills rather than say education.
“Even if you are a net recipient of public services, you lose because tax is spent on higher energy bills rather than say education.” Or potholes.
Or defence. Do you want to have to learn Russian – or Mandarin – or French???
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I have always regarded Jonathan Brearley CEO of OFGEM as totally the wrong person to be in charge of a consumer protection quango, he was a civil servant and wrote the climate change act with Baroness Worthington for Ed Milliband,
This was the guardian 5 months ago.
Jillian Ambrose Energy correspondentWed 18 Oct 2023 18.24 BSTShare
The chief executive of the energy watchdog could be replaced after a turbulent few years which has caused staff morale to slump and supplier complaints to increase, its incoming chair has said.
MPs on the energy select committee said there were concerns about Ofgem’s future direction and asked Mark McAllister, the government’s pick to chair the regulator, whether he would consider replacing the chief executive, Jonathan Brearley, if he found he was not leading the watchdog in the right way.
McAllister, an energy executive who is expected to take up the role of chair next month, said: “I would if I found that was the case.”
Looks like the writing is on the wall for Brearley and he has had to change direction, about time, OFGEM have screwed up for years (as have all the others OFWAT,OFCOM, OFSTED)
It’s not the cost of “hitting Net Zero” nor the “short term costs” of Net Zero that are the problem. These are lies. Net Zero will permanently raise energy prices and thus raise the price of virtually everything else. It will make us all poorer. Time for these lies to stop.
It already has raised the price of virtually everything.
Liam Halligan on GB News was saying things that would never be heard on the BBC about why our electricity is about the most expensive in the world and that the claims from politicians that unreliables are cheap are rubbish. His only flaw was in not knowing that battery storage will never be able to make unreliables work but he did say that it was not yet an option. He ended with asking why has it taken the socialist Tories 14 years to realise more gas generation was required.
don’t worry. At the current rate of government announcements there will only be poor people left. Then the entire tax revenue will fall on the public sector whose incomes are protected.
No problem, their incomes would be increased to cover the tax burden (subsidised like Tesla and heat pump owners). That would work, surely?
Could, COULD, get an ambulance round to their office, obviously had a brain malfunction.
The costs of hitting net zero could hit the poorest households hardest
Whah! Whah! They could take on another job.
Appeals to pity are stupid.
So OFGEM speaks and the World shakes- stating the obvious is painful and shows just how out off touch they are.
Was it not OFGEM who agreed to raise the daily standing charge whilst claiming that without it, prices would have to rise.
Was it not OFGEM who agreed the proposal to bring in demand pricing to encourage consumers by driving prices up, to use less peak time energy, hence the drive to force “Smart Meters” on the general public – it is not so that you control your energy usage by checking the meter, it is so that the energy companies can increase prices as and when they deem demand is “high”, oh, as too how high they increase them, OFGEM has left that option to the providers, thus showing how little they care for energy consumers who are being forced to choose between – Eat, Heat or Light.
OFGEM has always been in the pocket of the energy providers, it has never been fit for purpose.
I’m sure someone can help me here. If a windfarm took subsidies and won a supply contract at say £36 MW, but then didn’t honour the contract and sells power at £72 MW then shouldn’t they be hit with a “windfall tax”? (I’m genuinely confused about this dishonouring contracts BTW) Thanks
Yes, Chris, they would be liable.
But the windfall tax only kicks in at prices above £75/MWh, and is 45% tax on the windfall.
So they are still much better off than selling at £38
Thank you Paul. Makes things much clearer. Pity they don’t get hit with 75% tax, I mean, level playing fields and all that! How about Drax massive profits, I don’t suppose we can get any of that back, after all, its a windfall to the operators at our cost!. Thanks again.