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UTILITY WEEK | 26TH MAY - 1ST JUNE 2017 | 13 Policy & Regulation Policy & Regulation support initiatives to make the switching process easier and more reliable in the retail energy market. Utility Week understands that the ambig- uous wording of the price cap pledge reflects continuing tensions within the government over how to proceed with the cap. May and her policy chief, Nick Timothy, have both publicly backed government intervention on pricing levels, but more free market voices in the Cabinet oppose this stance A Conservative source says: "An absolute cap would distort the market and big suppli- ers will congregate around that level." Greg Jackson, chief executive of Octopus Energy, says a fixed cap would be too blunt an instrument: "If wholesale prices drop, consumers aren't provided with any benefit. If they rise, you could end up with a perverse situation where all companies are supplying consumers at a loss. Any form of cap needs to be flexible." One way of meeting the Conservative manifesto proposal could be to pick up Citi- zens Advice's proposal to limit price caps to those vulnerable enough to qualify for the Warm Homes Discount. Jackson believes the wording of the Con- servative manifesto also leaves the door open for the idea of a relative price cap champi- oned by Conservative backbencher John Pen- rose in the run-up to the general election. "It's so important that the industry comes up with a good solution for the government. For those that want more transparency and competition in the market, this is a massive opportunity," he says. "We now need to work constructively with the big six on the best solution," says the Tory source. The government's mooted review of energy costs provides an opportunity for these tensions to be teased out away from the febrile environment of a general election campaign. There is also potentially scope to intro- duce into the mix other factors such as greater support for energy efficiency, which may more successfully bring down bills in the longer term. However, Jackson urges the government not to use the review to kick rising energy prices into the long grass. "I hope govern- ment will have a quick but thorough analysis rather than a long drawn out investigation, so that consumers don't have to wait," he says. Manifesto matrix PRICES Conservatives Extend price cap for customers on prepayment meters to more customers on "poor- est value tariffs" and to micro-businesses. Launch review of energy costs. Labour Immediate' emergency price cap to keep average dual annual fuel household energy bill below £1,000 en route to establishment of a "fairer system". OWNERSHIP Conservatives No mention Labour Bring the energy grids back into public ownership "over time" with legislation to allow publicly owned local companies to purchase regional infrastructure. Regain control of energy supply networks by altering the national and regional network Operator licence conditions. RENEWABLES Conservatives Maintain existing opposition to onshore wind in England but relax stance on projects in remote islands of Scotland and explore ways of harnessing Welsh natural power generation resources. Labour Sixty per cent of the UK's energy should be generated from low carbon or renewable sources by 2030 and support development of tidal lagoons. Renewable energy pro- jects would be a priority for a proposed £250 million National Investment Bank. ENERGY EFFICIENCY Conservatives Establish an industrial energy efficiency scheme to help large companies install measures to cut their energy use and bills. Labour Insulate four million homes, with homeowners offered interest-free loans to install insulation; energy efficiency standards for rented homes upgraded; and the Landlord Energy Savings Allowance re-established. FRACKING Conservatives Support development of shale industry in Britain with a shake-up of planning laws. Decisions on major shale schemes would be taken at a national level and test drilling would be treated as permitted development, not requiring full-scale consent. Resi- dents of communities hosting fracking schemes will be offered a share of any profits generated. Labour Ban NUCLEAR Conservatives No specific mention. Labour Support new nuclear projects, ensuring that the technology will remain part of the UK's energy supply. The other parties Of the three big national parties, only the Lib- eral Democrats break the emerging consensus that capping is the answer to energy prices. The Lib Dems say average heating and lighting bills are "too high", but their manifesto continues to put faith in competition. They declare that at least 30 per cent of the house- hold market should supplied by competitors to the big six by 2022. The long-term solution to rising bills, according to their manifesto, is better energy efficiency. By 2022, the Lib Dems promise to bring four million homes up to the Band C energy rating, which they believe should be the long-term benchmark for all of the nation's housing stock. In addition, the Lib Dems say they would restore the zero-carbon standard for new homes and extend it to non-domestic buildings by 2022. Plaid Cymru's manifesto pledges to cut the bills customers' bills in Wales by establishing a Welsh energy company. They would also trans- fer responsibility for generation to the National Assembly in Cardiff with the goal of enabling Wales to become self-sufficient in electricity generation from renewable sources.