Ofgem's director general of markets says he is aware that increases in energy bill prices due to the energy regulator's new price cap is "unwelcome news" for customers. Tim Jarvis blames the changes on the "international wholesale price of gas", which he says the UK is still reliant on. Report by Faragt. Like us on Facebook at http://www.facebook.com/itn and follow us on Twitter at http://twitter.com/itn
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00:00So look, I very much recognise that this is unwelcome news for customers.
00:04What we're seeing is prices being driven up by the international wholesale price of gas,
00:08which is where we're still predominantly getting our energy from, and so that's why the cap
00:12has had to go up to adjust for that.
00:15The way that prices will ultimately get down is by reducing our reliance on gas significantly
00:23for the amount of time during the day and during the weeks and months when we're actually
00:26relying on gas.
00:27We're still over-relying on gas, and that is what is driving up those prices.
00:31So yes, we are seeing more new renewables.
00:33The more we get onto the system, the more we build up the network to accommodate those
00:37renewables, we will start to see a lower reliance on gas, and then we'll start to see prices
00:41coming down.
00:42But this does take quite a bit of investment and a bit of upgrade in the network.
00:46So we have to get the balance right.
00:48We have to protect consumers in the longer term, and that means keeping a stable market
00:52and making sure that suppliers are able to provide the customer service and invest in
00:56everything that we need to run the system.
00:58But we do bear down on profits through the price cap for suppliers.
01:02We see profits in other parts of the energy system, which we don't regulate, I recognise
01:05that.
01:06People sort of digging out gas and oil and making big money out there, but that is something
01:10that we look to the government to deal with that, and successive governments have imposed
01:15windfall taxes on those profits.
01:17But our role is to regulate the suppliers, and we do that, and we do drive down profits.