The study criticised the energy industry’s current pricing system and stated that the energy sector as a whole needed a new regulatory body to oversee its long-term development.
The current fragmented, market-based approach, the study argued, is unsustainable and will not provide the £100bn needed to ensure ageing infrastructure is replaced and as such could threaten the country’s energy security.
‘For the majority of us energy is actually too cheap’
Professor Phil Taylor, head of the Institute for Research on Sustainability, explained that cheap energy was contributing to energy waste.
“The current pricing model does not accurately reflect the high economic and environmental cost of generating, storing and distributing energy,” he explained.
“In fact, because of the way energy is sold today, it becomes cheaper the more we use. This is unsustainable.
“Although we must make sure people can afford to heat their homes, for the majority of us energy is actually too cheap – this is why we leave lights on, keep appliances running and use machines at peak times when energy costs more.”
Brits pay less than most European countries
According to think tank VaasaETT Global Energy, the average home in the UK spends 19.31 euro cents per kWh, close to a third cheaper than homes in Denmark and Germany.
When adjusted for each country’s cost of living, British homes are the 16th cheapest out of the 22 European countries surveyed.
These findings are likely to surprise many consumers, who have seen their energy bills jump almost 170% in the past decade.
At present there is a gap of close to £300 between the cheapest and most expensive energy plans available in the UK. Ovo Energy and First Utility are currently topping the best buy table with sub-£1,000* per year offers – the cheapest seen in the past two years.
* Based on a medium usage customer using 3,200 kWh of electricity and 13,500 kWh of gas paying by direct debit with bill sizes averaged across all regions.