Government plans more support amid rising energy costs

Ofgem has announced a 6.4% increase in the energy price cap from April to June 2025, raising average annual household bills by £111. The rise is driven by wholesale price fluctuations and policy costs.

Since November 2024, four million customers have moved to fixed tariffs, bringing the total to 11 million. Ofgem CEO Jonathan Brearley stated: "Our reliance on international gas markets leads to volatile prices, reinforcing the need for investment in a cleaner, homegrown system."

Government response

The government is consulting on expanding the Warm Home Discount scheme, which provides £150 off energy bills. The expansion could benefit 6.1 million households. Energy Secretary Ed Miliband said: "Expanding the Warm Home Discount can help protect millions from rising energy bills."

Support is also growing for Ofgem’s proposed energy debt relief scheme, which could see suppliers write off or match repayments for struggling customers.

Zonal pricing debate

Ofgem confirmed that standing charges will decrease for most households from 1 April, though some will see increases due to network costs.

A report commissioned by Octopus Energy suggests zonal pricing could save consumers up to £74 billion by 2050. Octopus CEO Greg Jackson said: "Zonal unlocks massive savings by encouraging energy use closer to production." However, RenewableUK warns it could raise costs for England and Wales. Deputy CEO Jane Cooper noted: "The uncertainty of zonal pricing could drive up clean energy project costs."

The energy sector faces key decisions on affordability, policy reform, and market structure as it transitions toward a sustainable future.

Read more: Ofgem’s price cap rises, government consults additional bill support