A frozen price cap could cost £100bn

Presented to business secretary Kwasi Kwarteng by Scottish Power chief executive Keith Anderson, the plan would involve capping household bills at about £2,000 a year for two years. 

The plans, first reported by the Financial Times, ask the government to guarantee loans to energy companies, allowing them to keep bills frozen while they buy the gas needed. The £100bn figure was the company’s estimate of the difference between what it would cost to buy the energy and the present price cap. 

This would then be repaid through consumer bills over the next 20 years. 

In separate plans proposed by the National Grid, people could be paid for turning off high-energy appliances during peak times this coming winter, with those with smart meters potentially getting up to £6 per kilowatt hour in savings. 

Rebates for not using appliances like tumble dryers, dishwashers and electronics between 5pm and 8pm would net customers a return. 

It’s also drawn up plans that suggest energy shortages could last for three years, and that coping with this would require large industrial companies to cut gas usage each winter until 2025. Under these plans, according to The Daily Telegraph, companies would be paid £5m this winter to reduce their consumption and help avoid uncontrolled blackouts. 

Energy regulator Ofgem is expected to announce the next update to the price cap this Friday (26 August) and will be applied from 1 October. According to the latest analysis from Cornwall Insight, it’s likely to increase by 80% - going from £1,582 a year to £3,553 a year.