Research carried out by the government spending watchdog, the National Audit Office, has revealed that ministers cannot guarantee energy bills will be affordable in the future, as billions of pounds will be needed to invest in energy infrastructure.
The report states: “The available projections suggest that increases in both energy and water bills will continue to outstrip inflation, on average, up to 2030.”
The news follows EDF’s announcement that it will be putting up its gas and electricity prices up by 3.9% in January.
Bills could rise 46% by 2020
Speaking at yesterday’s annual energy industry conference, Angela Knight, chief executive for Energy UK, revealed a different body of research which predicted energy bills would rise by 46% by 2020.
The research was carried out by investment bank UBS and led Knight to defend energy companies, saying: “The industry has become a lightning conductor for the general concern about the cost of living. As a result we stand accused for things that we do, for things that we don’t do, for things that we are responsible for and things that we are not.”
She added that despite the criticisms, the UK has one of the lowest electricity price ranges in the EU and the lowest gas price. She blamed a combination of green policies, the need for energy security and affordability for constantly rising energy bills.
‘These figures are simply shocking’
Ann Robinson, director of consumer policy at uSwitch, said: “These figures are simply shocking. The country is already on the brink of an energy affordability crisis with almost seven in ten households going without heating at some point last winter and over eight in ten saying they will be rationing their energy use this winter in an attempt to keep a lid on bills. Once bills hit £1,500 a year, almost four in ten will be forced to turn their heating off entirely.
“Affordability has got to move back to the heart of energy policy. The treasury has got to do a proper impact assessment to see what this means for consumers in real terms but it’s also important that we get competition working fully in the energy market.”
‘Energy costs are now the top household worry for nine in ten’
“Most consumers are seriously concerned about their energy bills and the recent price hikes have only added to their woes, making almost eight in ten more worried about their winter fuel bills this year. Such is the concern about affordability that energy costs are now the top household worry for nine in ten consumers and the fact that this could continue to be a worry for almost the next two decades is a dreadful prospect. These NAO predictions will only serve to add more distress for households.
“I would now urge consumers to ‘future-proof’ their energy bills this winter by signing up to one of the many competitive fixed price energy tariffs on the market. Now more than ever, it is imperative that consumers get serious about making their home energy efficient, keeping themselves informed of all the options available to them, rather than resorting to drastic and potentially harmful measures to keep warm.”