Households are likely to see their energy bills rise even higher, experts have said, with UK gas and electricity reserves hitting a critical low.
UK households may also be plunged into regular blackouts in just two years, as power stations continue to close, and investment in new plants is put back.
These are the warnings expected to be set out by energy regulator Ofgem, which is soon to release its electricity supply-and-demand forecast in a few weeks.
It is believed the average household dual-fuel bill – now costing £1,400 – could shoot up in the next five years to the point where bill payers are shelling out a massive £2,000. Experts are concerned that this could push many people into fuel poverty.
Ofgem is also expected to reveal that storage capacity has dropped, the Express reports. This is due to the decline in gas-fired plants, and the fact that cheaper coal-fired plants are being forced to run at full capacity.
Rocketing price of gas
What’s more, the wholesale price of gas has shot up, caused by dwindling North Sea supplies and a greater reliance on imports from abroad. Energy firms, meanwhile, have made it clear they will not invest in gas until the government provides a subsidy for it along with green energy, or it simply becomes more profitable.
Mark Todd, founder of energyhelpline.com, told the newspaper that Britain is experiencing a supply crunch:
“Coal-fired stations are being closed due to the drive for green energy, and nuclear power stations are gradually becoming defunct.
“Gas-fired plants are probably closing because the price of gas makes them unprofitable; there is very little storage capacity in the UK and that is likely to fall further.
“We are in a supply crunch and the likelihood is that electricity prices will rise over the next couple of years: 20% does not sound unreasonable.”
Meanwhile, Peter Atherton of Liberum Capital, warned that Britain’s spare power margins are dropping so rapidly that bills could rocket as soon as winter 2014.
However, Ofgem claimed the reports on what it may soon announce are merely “pure speculation”.