Consumers might find it increasingly difficult to access cheap energy in the coming years as Britain's ageing energy infrastructure needs urgent updating, Ofgem has stated.
The industry regulator warned that customers of energy suppliers could be hit with higher gas and electricity bills in the next ten years if the UK is to meet its green energy commitments.
A total £200 billion of investment is needed to upgrade the country's energy sector, which Ofgem identifies as being the amount required to switch to new sources of green electricity generation such as wind, biomass and nuclear, as well as make improvements to the UK's infrastructure.
The regulator said that its new price control model, RIIO (Revenue = Incentives + Innovation + Outputs), could attract vital investment by offering incentives to companies for innovation and efficiency while keeping prices as low as possible for customers.
Chief executive Alistair Buchanan commented that RIIO could give "consumers and network users a bigger voice in what they want network companies to deliver and then reward companies that take the initiative and deliver this efficiently".
It comes days after the energy watchdog set out proposals that would require energy suppliers to give their gas and electricity customers 30 days' notice for any price increases, the Guardian reported.
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