Energy costs could rise dramatically

14th October, 2009

If gas and electricity supplies become more volatile, British consumers could find they will be in line for large increases in their energy bills over the next few years.

Ofgem have carried out a review of the energy market in Britain and have come up with some sobering statistics. The review says that unless an investment of up to £200 billion is pumped in to meet supplies and environmental criteria, consumers could be faced with paying as much as £2,000 a year. Ofgem have warned that gas and electricity supplies could increase in price by as much as 60 per cent by 2016 with an estimate of lowest price rise being in the region of 14 per cent by 2020.

Ofgem felt that in the future Britain’s reliance on gas could fall and our use of electricity could rise if the Government supported investment in renewable energy, nuclear and carbon capture and storage. It also said that if the recession continued and gas and electricity prices remained low, at least in the short term, it could reduce the incentive to construct new renewable and nuclear power stations. It did say that a 60 per cent rise in bills would be caused if wholesale gas prices increased as a result of rising economies around the world competing for energy resources and it continued to say that we needed to make significant changes would need to be made in the way we use energy as well as that generated to manage the “variability associated with increasing reliance on wind power”.

 

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