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How do network and policy costs impact our energy
bills?
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What is the impact of global instability and
conflict?
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NESO CEO Fintan Slye and Ofgem Chief Exectutive face ESNZ
questions
As the UK's energy costs once again fall prey to geopolitical
crises beyond our control, the Energy Security and Net Zero
Committee will question the energy market regulator and the
system operator on the impact of the Iran conflict, and on the
share of our household energy bills that are not linked to the
wholesale price of gas.
What must change to bring those “non-commodity” costs down?
Russia's 2022 invasion of Ukraine exposed weaknesses in the UK's
energy market, with supplier failures and emergency Government
support costing taxpayers tens of billions of pounds. And
although wholesale gas prices had begun to fall since their peak,
the current Iran conflict has sent the price soaring again.
In October, E.ON UK CEO Chris Norbury told the Committee that by
2030 non-commodity costs — including network charges, policy
costs, operating costs and energy debt — could be so significant
that even if wholesale prices fell to zero, bills might remain at
today's levels.
In the November 2025 Budget, the Government shifted some policy
costs — including the Energy Company Obligation and part of the
Renewables Obligation — from household bills to general taxation.
At the same time, significant investment in electricity networks
is required to modernise infrastructure and support clean power,
following decades of underinvestment, while the expansion of
storage capacity offers exciting opportunities.
The Committee has previously argued that windfall profits from
network operators should contribute more to reducing the burden
of energy debt on bills, describing Ofgem's current approach as
inadequate.
MPs will examine:
- The scale and trajectory of network
and policy costs
- The impact of investment
requirements on future bills
- Options for reducing the burden of
energy debt
- How the regulatory framework can
better protect consumers while enabling a secure, clean energy
system
Witnesses on Wednesday 4
March at 3pm:
-
, Chief Executive, Ofgem
- Akshay Kaul, Director General for
Infrastructure, Ofgem
- Fintan Slye, Chief Executive
Officer, National Energy System Operator (NESO)
- Claire Dykta, Director of Strategy
and Policy, National Energy System Operator (NESO)
