LABOUR can cut energy bills by a whopping £5.1 billion a year by ending “unfair profiteering” by gas-fired power stations, Greenpeace research found today.

The average household would save £65 a year on their electricity bills, the average pub £850 and the average cafe £820 by removing gas plants from the wholesale energy market, it said, with energy intensive industries also standing to make significant bill savings.

British electricity prices are currently set by the most expensive generator used to produce it — nearly always gas plants.

Ministers were urged to reform energy pricing last month after regulator Ofgem announced that the average household’s energy bill is to rise to £1,755 a year from October — despite wholesale prices falling by 2 per cent over the past three months.

Greenpeace UK political campaigner Angharad Hopkinson, said: “It’s absurd that we still allow expensive and volatile gas to set the price we pay for electricity.

“Renewable energy, like wind and solar, is cheaper than gas, its prices are far more stable and we’re producing more and more of it every year in the UK.

“But because the energy system is rigged in favour of the gas industry — keeping prices and their profits high — our bills have soared and we’re not reaping all of the benefits clean power brings.”

Report author Adam Bell, Stonehaven policy director and former head of energy strategy at the Department for Business, Energy and Industrial Strategy, said: “Taking gas out of the power market is a radical step, but these are radical times.”

Great Grimsby and Cleethorpes MP Melanie Onn, who sits on the energy security and net zero committee, added: “We must show families up and down the country that the transition to renewables is as much about their pockets as it is about the planet.”

End Fuel Poverty Coalition co-ordinator Simon Francis told the Morning Star: “The electricity market needs structural change, not minor tweaks or warm words.”

The Department of Energy Security and Net Zero said: “Our mission for clean power by 2030 will replace our dependency on unstable fossil fuel markets with clean, homegrown power controlled in Britain — which is the best way to protect billpayers and boost our energy security.”