Millions of households face a greater than expected increase to their energy bills of £85 a year from April after Europe’s gas storage levels slumped, according to analysts.
The average gas and electricity bill for households across England, Scotland and Wales is expected to rise by nearly 5% from April to £1,823 a year for a typical household under the energy regulator’s price cap.
The forecast by the influential consulting firm Cornwall Insight is higher than its earlier prediction that prices would rise to £1,785 a year this spring after colder weather and limited renewables caused gas storage levels to fall across Europe.
The energy industry regulator for Great Britain, Ofgem, will confirm the figure for the energy price cap covering the three months from 1 April on 25 February. The regulator increased the cap in January by 1.2% to a rate equivalent to £1,738.
Europe received the last Russian gas sent via Ukraine’s pipelines in the early hours of New Year’s Day after a gas transit deal struck between the countries five years ago came to an end.
The latest energy price increase would mark the third consecutive quarterly rise in costs for households, in a blow to the government’s promise to bring down household energy bills by “up to £300 by 2030”.
Consumers could face even higher bills if they use more than the typical amount of energy. This is because the energy price cap, which is recalculated every three months, limits the rate energy suppliers can charge customers for each unit of gas and electricity – not the total bill.
About 9 million households that use variable tariffs linked to the price cap will see an immediate impact on their bills from April, while it will be delayed for others on fixed tariffs.
Ahead of the forecast, Ed Miliband, the energy secretary, wrote an urgent letter to Ofgem saying the price rise meant it must move faster to protect consumers.
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He called on Ofgem’s chief executive, Jonathan Brearley, to set out faster mitigations that the regulator could take to ease the pressure of the “rollercoaster” of global gas markets, which is likely to include speeding up the rollout of renewable energy.
Doug Parr, the policy director at Greenpeace UK, said: “While consumers will require urgent support in the short-term, we can’t keep papering over the cracks. Bill payers need cheaper energy and more stable prices – something that would also contain inflation and boost the economy – renewably powered heat pumps and better insulated homes are the only surefire way to deliver it.”
Source: www.theguardian.com