Energy regulator Ofgem has signed off investment in the regional electricity networks that will add GBP4.30 a year onto household electricity bills. However, this is just the thin end of a wedge warns a uSwitch.com as it is a small part of a much broader GBP233.5 billion energy investment programme that is expected to add GBP548 a year in total onto consumer energy bills.
This could see household energy bills hit as high as GBP4,733 a year by 2020, nearly four times higher than they are today. Ofgem itself calculated that household energy bills could hit GBP2,000 a year as a result of investment, but recently described this as ‘over optimistic’.
Ann Robinson, Director of Consumer Policy at uSwitch.com, says: “GBP4.30 a year may seem small fry, but in fact it’s a wake-up call for us all. This is just the beginning of a huge investment process that will lead to significantly higher household energy bills. The GBP5,000 a year energy bill may seem like an outside possibility, but we have to remember that energy bills doubled in the last five years alone and that the huge investment needed just to keep the lights on in Britain will alone add GBP548 a year onto our bills. The fact is we are entering a new era of high cost energy and households will have to adapt their behaviour accordingly.
“The Government has been banging the drum for energy efficiency for a while now, but consumers have been reluctant to spend money on these measures. As a result, energy efficiency has been massively underperforming even though it is one of the biggest defences we have against escalating energy costs. We also have a competitive energy market, and yet less than 5% of consumers are on the most competitive energy plans – most people are paying far more than they have to for the energy they use.
“This has to change. My advice to consumers is to invest in making your home more energy efficient, reduce the amount of energy you use and make sure you are paying the lowest possible price for it. Big projects such as a new energy efficient boiler or home insulation can be expensive, but the savings you make through cutting the price of your energy could be re-invested into energy efficiency measures so that you reap even greater rewards in the future.
“Don’t be put off. If cost is an issue, speak to your supplier to see if they can help – they have a pot of money available to help households with energy efficiency. Or contact the Energy Saving Trust for advice. The key thing is to start future-proofing yourself against higher energy bills now.”