Energy costs will be investigated in government's fresh independent review, led by professor Dieter Helm

 
Lynsey Barber
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British Gas Controversially Increases Its Energy Prices
Technology will have an impact on energy demand and supply (Source: Getty)

The price of energy is being put under the microscope in a new probe by the government in a bid to make bills the lowest in Europe.

Professor Dieter Helm, a university of Oxford economist focused on energy infrastructure, will lead an independent review of costs, taking into account climate targets and changing demand with the impact of new technology, from generation to distribution and supply.

"All homes and businesses rely on an affordable and secure energy supply and the government is upgrading our energy system to make it fit for the future," said business and energy secretary Greg Clarke.

Read more: Ofgem sets out tougher price controls from 2021

"We want to ensure we continue to find the opportunities to keep energy costs as low as possible, while meeting our climate change targets, as part of the Industrial Strategy."

Helm will make recommendations to government, which promised to cap prices in a pledge made during the General Election. Energy regulator Ofgem has also made fresh proposals to cap prices in a bid to protect vulnerable customers.

"The cost of energy always matters to households and companies, and especially now in these exceptional times, with huge investment requirements to meet the decarbonisation and security challenges ahead over the next decade and beyond," said Helm.

Digitalisation, electric transport and smart and decentralised systems offer great opportunities. It is imperative to do all this efficiently, to minimise the burdens. Making people and companies pay excessively for policy and market inefficiencies risks undermining the objectives themselves.

Read more: JP Morgan is going green with 2020 renewable energy commitment

Rising interest in electric cars is expected to create a jump in demand at peak times that could be bigger than the capacity of Hinkley Point C by 2030, according to National Grid.

The national energy operator revealed earlier this year that it was having discussion with one of the UK's top artificial intelligence companies about how machine learning technology could make the supply of energy across the UK more efficient. Google-owned DeepMind has already reduced the tech giant's energy use in its data centres by 40 per cent.

Last month the government announced plans to invest millions in developing electric batteries to make the UK a world leader in the technology.

The Confederation of British Industry welcomed the review as "an important part of a meaningful industrial strategy".

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