Ofgem unveils new energy price cap

The energy regulator has confirmed it will pursue even tighter restrictions on how much profit energy companies can make, in a move it said will result in lower prices for customers.

Ofgem has unveiled its desired methodology for the second energy price cap, which is expected to save consumers around £6 billion over the five years to 2026.

The method sets the allowed baseline return on equity at 4.3% in a cost of equity range of between 4% and 5%.

This is almost half the limit imposed in the previous cap and would be the lowest ever capital rate for energy network companies.