THE UK Government is facing calls to take “immediate action” after projections said the energy price cap could be set to rise to more than £1700 a year.
On Friday, Ofgem will announce the price cap for October to December, and experts at energy consultancy Cornwall Insight have projected a 9.3 per cent rise.
As it stands, the price cap – which sets a limit that suppliers can charge per kilowatt hour (kWh) – is set at £1568 per year, but Cornwall Insight said it could rise to £1714.
The group said there is also likely to be a further “modest” increase in January 2025, with more rises possible early in the new year due to “recent tensions in the Russia-Ukraine war”.
READ MORE: Chris McEleny: Scots are being left in the cold by a government failing to put up a fight
The price cap does not limit a household’s total bills because people still pay for each unit of gas and electricity they use – the figures provided are calculated for an average-use household and if more energy than average is used, a household will pay above the cap.
Craig Lowrey, principal consultant at Cornwall Insight, said: “Following two consecutive falls in the cap, I’m sure many hoped we were on a steady path back to pre-crisis prices. However, the lingering impact of the energy crisis has left us with a market that’s still highly volatile and quick to react to any bad news on the supply front.
“Despite this, while we don’t expect a return to the extreme prices of recent years, it’s unlikely that bills will return to what was once considered normal. Without significant intervention, this may well be the new normal.”
Lowrey added: “Immediate action is needed to ease the financial burden on households – such as the introduction of social tariffs, or reform of the price cap – but that’s only part of the solution.
“We must also develop a long-term strategy to secure our energy future. This means a fundamental overhaul of our energy system, with a strong emphasis on increasing domestic energy production.”
Simon Francis, coordinator of the End Fuel Poverty Coalition, said that the “reality is that bills will go up compared to today and will be around 65% higher than they were before the energy bills crisis started”.
“But instead of offering help, the Government has axed Winter Fuel Payments to millions and refuses to confirm if the Household Support Fund will be extended,” he went on.
“Not only do we need to see urgent movement on both these issues, but we need to see action to reduce energy debt and changes in the rules to reset Britain’s broken energy system so it is on the side of consumers.”
READ MORE: Kate Forbes: Cutting Winter Fuel Payment budget before devolving is disrespectful
And Adam Scorer, the chief executive of National Energy Action (NEA), said that if Cornwall Insights “alarming estimates are confirmed by Ofgem on Friday, energy bills and energy debt will stretch household finances beyond breaking point”.
He went on: “Households will go into winter with less support and higher prices. This can still be avoided if the UK Government and Ofgem act urgently to directly reduce customer debt levels and energy prices for those most in need.”
Ofgem changes the price cap every three months based on several factors, the most important of which is the price of energy on wholesale markets.
Ofgem is currently considering the future of price protection, including the suitability of the price cap and a potential permanent ban on so-called acquisition tariffs – cheaper prices for new customers to lure them away from their existing supplier.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel