Energy system cost allocation and recovery review
Summary
Ofgem reviews how energy system costs are allocated and recovered across electricity and gas consumers. Examines whether the current split of network, policy, and balancing costs between fuels and customer groups is fit for purpose.
Why it matters
Potentially structural. Rebalancing costs between electricity and gas could accelerate or hinder electrification. If electricity bills carry disproportionate policy costs, heat pumps and EVs face an artificial cost penalty versus fossil fuels.
Areas affected
Related programmes
Memo
Energy system cost allocation and recovery review | Ofgem Please enable JavaScript in your web browser to get the best experience. BETA This site is currently in BETA. Help us improve by giving us your feedback . Close alert: Energy system cost allocation and recovery review Publication type: Call for input Publication date: 30 July 2025 Last updated: 10 December 2025 Closed date: 25 September 2025 Status: Closed Topic: Energy pricing rules Show all updates Print this page Related links Recovering the costs of energy infrastructure investment from customers Share the page Share on Facebook Share on Twitter Share on LinkedIn Help shape how we can share smarter and more efficient energy system costs to protect you and support a cleaner, stronger economy. Details of outcome We are considering the full range of views and evidence submitted. This includes the impact of different approaches on different consumer groups. Our intention is to consult on policy options in spring 2026. We received 330 responses. 75% of these were from domestic consumers. Views differed among those who responded, on a preferred method for allocating and recovering energy system costs. However, there were several themes. These include: affordability fairness protecting customers in vulnerable situations calls for greater government-led targeted support data-informed decisions about recovery measures Read more details about the update to the cost allocation and recovery review in our online consultation . Original call for input Great Britain (England, Scotland and Wales) is transitioning to a cleaner, more secure and resilient energy system. As we reduce reliance on fossil fuels and invest to upgrade and maintain our infrastructure, the structure of energy system costs will change. At the same time, new technologies and uses are changing how and when consumers use energy. These changes raise questions about how the energy system should be paid for by consumers. This review looks at how we could recover costs from consumers in ways that: are fairer and more efficient support net zero support economic growth Who should respond We would like views from people and organisations within the energy sector. We also welcome responses from: domestic consumers non-domestic consumers consumer groups charities academia Print this page Related links Recovering the costs of energy infrastructure investment from customers Share the page Share on Facebook Share on Twitter Share on LinkedIn All updates 10 December 2025 added update to call for input and link to more details on Citizen Space. Close