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Reformed National Pricing for Energy

The Department for Energy Security and Net Zero is delivering the Reformed National Pricing (RNP) framework, which restructures electricity pricing and investment incentives for domestic consumers. The policy includes reforms to siting and investment levers to support energy market transformation and decarbonisation. The delivery plan is in active implementation with multiple chapters addressing pricing mechanisms and investment signals.

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Family: Scrutiny and evidence
4 Mar 2026 | Committee report linked

The Government should further prioritise reducing electricity costs by removing appropriate policy costs from electricity bills and funding them through general taxation. This would improve affordability for households and businesses, strengthen incentives for the electrification of heat and transport, and avoid placing additional costs on households that are not yet able to switch away from gas. Shifting policy costs from electricity to gas bills may improve price signals in the short term, ...

The Government should further prioritise reducing electricity costs by removing appropriate policy costs from electricity bills and funding them through general taxation. This would improve affordability for households and businesses, strengthen incentives for the electrification of heat and transpo

▤ View document · ↗ GOV.UK
29 Oct 2025 | Committee report linked

Time-of-use tariffs that allow customers to optimise the benefits of low carbon technologies such as heat pumps, electric vehicles and solar panels are welcome additions to the retail market, rewarding customers with low energy prices and supporting flexibility of the energy system. However, they are mostly designed for affluent consumers, and those with smart meters and high levels of digital literacy. Without measures to protect vulnerable consumers, such as a social tariff and improved ado...

Time-of-use tariffs that allow customers to optimise the benefits of low carbon technologies such as heat pumps, electric vehicles and solar panels are welcome additions to the retail market, rewarding customers with low energy prices and supporting flexibility of the …

▤ View document · ↗ GOV.UK
22 May 2025 | Committee report linked

Electricity is much more expensive than gas in the UK because gas generation sets the marginal wholesale price and most levies are placed on electricity bills, rather than gas. This is a significant disincentive for consumers switching from fossil fuel to electric heating and a major barrier to decarbonising homes. Lowering the price of electricity relative to gas has been the tipping point needed to encourage the mass uptake of low carbon heating systems in some European countries. (Conclusi...

Electricity is much more expensive than gas in the UK because gas generation sets the marginal wholesale price and most levies are placed on electricity bills, rather than gas. This is a significant disincentive for consumers switching from fossil fuel …

▤ View document · ↗ GOV.UK
28 Mar 2025 | Committee report linked

We remain concerned that even after the crisis has subsided, UK electricity bills are the highest of the countries providing comparable data to the International Energy Agency. The UK had the highest electricity price out of 25 countries reporting both domestic and industrial electricity prices in 2023, (including taxes and levies) and electricity is currently four–times more expensive than gas. Despite repeated promises, the Department has delayed taking action to rebalance energy prices by ...

We remain concerned that even after the crisis has subsided, UK electricity bills are the highest of the countries providing comparable data to the International Energy Agency. The UK had the highest electricity price out of 25 countries reporting both …

▤ View document · ↗ GOV.UK
28 Mar 2025 | Committee report linked

The United Kingdom has the highest price (including taxes and levies) for domestic electricity out of 25 International Energy Agency (IEA) countries reporting in 2023. Similarly, the UK has the highest price (including taxes and levies) for industrial electricity out of 24 IEA countries, again reporting in 2023.59 The price of the UK’s electricity is almost four times that of its gas. This is partly because the government’s levy for environmental policy costs (such as schemes to support renew...

The United Kingdom has the highest price (including taxes and levies) for domestic electricity out of 25 International Energy Agency (IEA) countries reporting in 2023. Similarly, the UK has the highest price (including taxes and levies) for industrial electricity out …

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28 Mar 2025 | Committee report linked

The Department recognised that rebalancing was an important issue, given the ratio of electricity to gas prices was “high compared to many comparative countries” as a “lot of the policy [ … ] and network costs in this country are placed on electricity rather than on gas”.61 But it has delayed addressing this issue for three years.62 The Department told us that it is important to address this issue in a way which is affordable and fair.63 This is because some households cannot avoid using gas ...

The Department recognised that rebalancing was an important issue, given the ratio of electricity to gas prices was “high compared to many comparative countries” as a “lot of the policy [ … ] and network costs in this country are …

▤ View document · ↗ GOV.UK
13 Nov 2022 | Committee report linked

Energy customers are either on non-default tariffs, where they have made an active choice about their energy tariff, usually fixing it at a certain rate, or on default tariffs, where they are more likely not to have done so. Since 2019, the government has capped the price per unit of gas and electricity for customers on standard default tariffs. In 2018, the Department determined that bills should be capped following findings from the Competition and Markets Authority that 70% of customers of...

Energy customers are either on non-default tariffs, where they have made an active choice about their energy tariff, usually fixing it at a certain rate, or on default tariffs, where they are more likely not to have done so. Since …

▤ View document · ↗ GOV.UK
13 Nov 2022 | Committee report linked

The NAO found that the vast majority of costs resulting from supplier failures was to make up the difference between what suppliers of last resort (SOLRs) could charge consumers under the cap and the cost of purchasing energy on the wholesale market.45 To address this lack of adaptability, in May 2022 Ofgem set out its preferred position to introduce quarterly, rather than six-monthly changes to the cap. It explained that this will allow suppliers to adjust their prices more frequently to ref...

The NAO found that the vast majority of costs resulting from supplier failures was to make up the difference between what suppliers of last resort (SOLRs) could charge consumers under the cap and the cost of purchasing energy on the …

▤ View document · ↗ GOV.UK
13 Nov 2022 | Committee report linked

The wholesale price of electricity is set by the cost of the type of power that most recently met the peak demand for energy. This means the wholesale price is often determined by the cost of gas even at times when renewables or other sources are generating large parts of the energy supply.58 The Department told us that, as the UK invests in more renewables and nuclear, more power will be generated by technologies with high construction costs relative to low running costs, in contrast to gas-...

The wholesale price of electricity is set by the cost of the type of power that most recently met the peak demand for energy. This means the wholesale price is often determined by the cost of gas even at times …

▤ View document · ↗ GOV.UK
26 Jul 2022 | Committee report linked

We recommend that the Government and Ofgem reform the Supplier of Last Resort process so that the costs are more fairly recouped whether through general taxation or energy bills.

We recommend that the Government and Ofgem reform the Supplier of Last Resort process so that the costs are more fairly recouped whether through general taxation or energy bills. Type: recommendation | Number: 18 | Paragraph: 77 | Response status: …

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26 Jul 2022 | Committee report linked

We call on the Government to consider the introduction of a social tariff for the most vulnerable customers and a relative tariff for the rest of the market, to be introduced once wholesale energy prices have stabilised. We ask the Government and Ofgem to report its findings on the above issues within nine months of the date of this report.

We call on the Government to consider the introduction of a social tariff for the most vulnerable customers and a relative tariff for the rest of the market, to be introduced once wholesale energy prices have stabilised. We ask the …

▤ View document · ↗ GOV.UK