The National Energy Guarantee (NEG) is a proposal by the New Economy Foundation (NEF) to reform the UK energy billing system. NEG involves a new energy billing structure that lowers and fixes the price households pay for their basic energy needs. Retailers then charge higher prices for higher usage. The policy comes with a simple set of allowances that work similarly to social tariffs. These target households with specific vulnerabilities and/or additional energy needs, and households that are transitioning to all-electric energy consumption. The proposal builds on the “Energy for All” campaign coordinated by Action on Fuel Poverty, which collected 652,000 signatures last year.
Most analysts predict energy bills will remain high for the rest of the decade relative to 2021 levels, prolonging the pain for households across the country. Beyond that, the government is considering further energy charges to pay for new hydrogen, nuclear and carbon capture and storage infrastructure. These electricity taxes have made the transition to heat pumps less attractive to consumers and maintained the use of natural gas. Despite these new taxes, if the approach is not changed, the fixed costs of the energy system, such as building and maintaining the national grid, will further burden household bills.
But these outcomes can be avoided, and through reforms to the system, consumers can be protected from current price increases and future increases in energy bills. The National Energy Guarantee is a direct response to these fluctuations, providing a strong safety net that is universal, cost-effective for consumers and governments, and has a net positive impact on the environment.
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