Energy committee calls for business electricity reforms and changes to network costs
21 October 2026
Businesses should get better access to long-term electricity deals as part of wider reforms to reduce energy costs, a parliamentary committee has recommended, alongside proposals to shift policy charges from electricity bills to gas.
The Commons Energy Security and Net Zero Committee wants the government to improve the market for corporate Power Purchase Agreements (PPAs), which allow organisations to buy electricity from generators under agreed contracts. It recommends considering government underwriting to address credit risks that can prevent businesses from entering into such agreements.
The government should also identify large public sector electricity users that could benefit from PPAs, according to the committee’s report, The cost of energy.
Wholesale electricity prices are frequently set by gas-fired power stations, leaving businesses exposed to international gas prices even when electricity is generated from other sources. The government expects gas to continue setting the wholesale electricity price around half the time in 2030.
The committee says existing reforms will not be sufficient to break the link between gas and electricity prices. It wants the government to publish the results of its review of possible changes before the end of 2026.
Rising electricity demand and ageing infrastructure will require investment in electricity networks. The costs of improvements are passed on to households and businesses through their bills. The committee recommends that the government consider how the wider energy sector could contribute to the cost of expanding and upgrading the networks, rather than relying on consumers to pay.
It also wants the government to publish a policy statement by the end of 2026 setting out how it plans to meet the energy demands of existing and planned data centres, and how this will affect its energy transition plans.
The report calls for remaining energy policy costs to be moved from electricity bills to gas bills, with separate support for gas customers least able to afford the additional charges. It also recommends identifying windfall profits in the energy system and using the proceeds to reduce bills. Network operators, which made higher profits than expected during the RIIO-2 regulatory period, should contribute towards reducing the growing burden of consumer energy debt.
Bill Esterson MP, chair of the Committee, says:
“The simple truth about the UK’s energy transition is that it is about costs and security – not arbitrary targets, not culture wars and division, not political point scoring.
“Our report today has bold, positive, workable solutions to help set the costs and get the support right. That’s all households and businesses across the UK need to adopt the new technologies of the transition and secure the benefits of less-costly, home-grown electricity for us all.”
The Commons Energy Security and Net Zero Committee says relying on consumers to bear all the costs of the transition could be the biggest barrier to achieving the government’s Clean Power 2030 target. It has called for changes to ensure the wider energy sector contributes to expanding and upgrading electricity infrastructure, rather than leaving households and businesses to meet the costs through their bills.
