The Energy Prices Act 2022 (Extension of Time Limit) (No. 2) Regulations 2026

The Explanatory Memorandum states that the extension is necessary to continue the 'RO to Exchequer' policy, which funds 75% of the Renewables Obligation costs for domestic energy supply.

The department reports that this policy, combined with the discontinuation of the Energy Company Obligation scheme, results in an average £150 reduction in domestic energy bills.

Proponents argue the measure addresses persistently high energy prices and provides significant benefits to low-income and fuel-poor households during cost-of-living pressures.

The government asserts that the extension is a required interim measure until new primary legislation can be introduced to provide a permanent legal basis for these energy grants.

The government acknowledges that the policy may lead to an increase in greenhouse gas emissions due to the 'rebound effect' where lower prices result in higher energy consumption.

Legal or procedural concerns could be raised regarding the repeated use of temporary six-month extensions for a multi-year policy instead of permanent primary legislation.

The department notes that while the policy provides bill relief, it involves a substantial transfer of approximately £6.7 billion from the Exchequer to energy bill payers over three years.

Some parties may cite administrative burdens placed on the Department for Energy Security and Net Zero and Ofgem to manage and enforce the grant scheme.