Ofgem has initiated discussions on energy price caps, floating options such as caps based on vulnerability and age of energy use.

The price cap was introduced in January 2019 to prevent people on variable tariffs from being cheated. Initially, it changed several times a year, but since 2022, it has been updated every three months.

Ofgem, the energy regulator that sets the price cap, said now is the time to consider changes to ensure customers continue to pay a fair price for energy and receive the benefits of net zero.

As more households opt for time-of-use tariffs, retaining a universal price cap that works for everyone may become more difficult, the report said.

Options proposed in Ofgem’s discussion paper include price caps that take into account age or vulnerability, and protections such as limits on the profits suppliers can make.

Tim Jarvis, retail and marketing director at Ofgem, said: “We are looking in detail at the elements of price caps that have worked well and the challenges we have identified in recent years, while also taking into account the wider scope of the impact on future consumers. Energy will be used and paid for to ensure we have the right measures in place to fully protect and benefit consumers.”

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After major gas supplier Russia launched a full-scale invasion of Ukraine in February 2022, caps and fees soared – the cap in the winter of 2021/22 was £1,216, but by January last year it had soared to more than £4,000.

Between April and the end of June this year the cap – based on a typical household using electricity and gas and paying by direct debit – will drop to £1,690.

Critics of price caps say it has become a barrier to competition, leading to higher prices and higher inflation.

Ofgem’s consultation is open until 6 May and is seeking views from charities, consumer groups, businesses, bill payers and suppliers.