UK energy price cap will be a tricky balancing act

The UK government has pledged to cap domestic energy prices, but it will struggle to protect consumers while encouraging investment in low-carbon generation The UK government has pledged to cap domestic energy prices, but it will struggle to protect consumers while encouraging investment in low-carbon generation.
By Peter Stewart 26 April 2017 0 25658
Electricity pylons in the UK. Theresa May's government will struggle to reduce carbon emissions if it introduces a domestic energy price cap. (National Grid)

Ironically, UK Prime Minister Theresa May’s decision to cap electricity and gas prices resembles the pledge made by former Labour leader Ed Miliband in 2014 – a policy that was derided by the Conservative party at the time. The Tories are expected to include a commitment in their manifesto for the June general election to introduce a mechanism to cap prices that will respond to market conditions. It would be administered by Ofgem, the energy regulator.

May has departed from the traditional pro-market stance of previous...

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