Energy News

Energy bill £4.30 increase is just the start

Monday, 7 December 2009

By Hazel Cottrell - hazel@consumerchoices.co.uk

Energy bills will increase by £4.30 a year to pay for improving regional electricity networks, but experts say this is just the first price hike of many.

Energy regulator Ofgem (www.ofgem.org.uk) has said that suppliers can increase average energy bills by £4.30 a year for five years to pay for upgrading the UK’s electricity networks.

The 14 networks were built in the 1950s and 1960s are in need of around £7.2billion investment over the next five years. When Ofgem proposed the network upgrades in August this year, it said the investment required would be £6.5billion, which would add £3.76 a year to consumer bills.

While the sum is still small, experts predict that this price hike will be the first of many as the government’s plans to secure the UK’s long-term energy supplies, reduce carbon emissions and roll-out smart meters are expected to cost £233.5billion.

These plans could add £548 a year to household bills for the next 15 years, according to Ernst & Young and calculations by uSwitch.com suggest that energy bills could be as high as £4,733 a year by 2020.

Ann Robinson, director of consumer policy at uSwitch.com, said: “£4.30 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.”

Chris Eagle, commercial manager at Energychoices.co.uk, advised: “Our energy bills are only going to get more expensive, unless we take control now and reduce the amount of energy we use.

“Energy efficiency is the way forward, and from getting into the habit of switching off your lights to investing in installation, the actions you take now will make a difference to your energy costs in the future.”

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