Analysts said the move made sense but would do little to ease the immediate pressure on households given the time needed to introduce reforms.
Tom Edwards, of energy consultancy Cornwall Insight, said: “Electricity market reform is necessary to meet the demands of a net zero world and have a 21st century system, but there is little likely to solve the cost of living crisis this winter.
“It’s a change that will take a long time to implement, maybe around two to three years.”
Currently, less than 40% of UK electricity is produced in gas-fired power stations. But their important role in the electricity system means that gas effectively sets the price of electricity in the market.
This means that consumers see less benefit in their bills from other sources of generation that do not have gas fuel costs, such as wind and solar panels. As their role in power generation increases, so does market reform.
It comes as Mr Sunak considered a windfall tax on power companies which have benefited from high wholesale prices in recent months, having recently introduced one on North Sea oil and gas producers.
It faces pushback from industry figures who say it could discourage vital energy investment, however, with many saying broader market reform should take priority.
The UK’s current inflation rate of 9% compares to inflation in France of 5.8%. The French government has helped reduce household energy bills after ordering its state-owned electricity company, EDF, to sell more electricity at artificially lower rates than rivals.
The French electricity market is markedly different from that of the United Kingdom, which is dominated by EDF’s nuclear power stations, but wholesale prices have also increased there in the context of a drop in nuclear production and a market of electricity strained in Europe. EDF said the move would cost it up to $8.4 billion.