The government could reduce energy bills by tens of billions of pounds by subsidising the cost of gas burnt in power stations, experts have suggested.
Providing gas at an “acceptable” price for power plants would reduce the wholesale price of electricity, so preventing old solar, wind and nuclear power plants making profits that are pushing bills up, Cornwall Insight said.
This could be a cheaper way of helping customers than leaving bills high and providing direct subsidies to households, the consultancy believes.
On Friday Ofgem said that the cap on energy prices for most households would rise by 80 per cent to average £3,549 a year from October. Cornwall, which had predicted the October cap level to within £5, said that bills could rise again
