Government will "roll back green charges" and make energy market more competitive, says Prime Minister

Speaking at Prime Minister's Question Time, David Cameron said that there had to be a "frank conversation" about the reasons behind the energy price increases announced in the last couple of weeks. He also proposed that a "proper competition test", which would examine whether the energy market could be more competitive be carried out over the next year.

We "need to roll back the green charges that [the last government put in place]," he said.

Earlier this week, Deputy Prime Minister Nick Clegg told the Financial Times that the Government planned to "stress test" the impact of environmental policies, such as the costs of meeting the Energy Companies Obligation (ECO), on consumer bills. The ECO is a collection of legal obligations on larger energy suppliers to deliver energy efficiency measures to domestic energy users.

Meanwhile, the Department of Energy and Climate Change (DECC) has begin its 'balance of competence' review of the role of the EU in relation to UK energy policy. Its public call for evidence will run for the next three months. The review will consider the internal energy market and its contribution to the single market and growth; security of supply; indigenous resources and energy infrastructure development; sustainability and energy efficiency measures; renewable and carbon capture and storage; agreements between the EU and third countries; and nuclear and Euratom. It will not consider climate change targets or the EU Emissions Trading System, which will be covered by a separate review.

A spokesperson for DECC said that the department was unable to comment on the extent of the Prime Minister's plans, but that any review would not change support for large-scale renewables or feed-in tariffs for smaller projects. These subsidies were "essential for investor confidence in the renewables sector and our commitments to a low-carbon economy", DECC said.

"The Government is looking at how to get people's energy bills as low as possible to help hard-pressed families," the spokesperson said. "We've already increased competition, brought new players into the market to offer consumers real choice and the most vulnerable are getting direct help with their bills this winter. We'll continue this work to make sure consumers are getting a good deal."

The Government has estimated that around £110 billion worth of investment in electricity generation is needed to replace aging infrastructure and comply with environmental standards.