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With the energy price cap rising today (1 October), the latest analysis from energy and climate think tank the Energy and Climate Intelligence Unit (ECIU) paints a grim picture of the UK’s energy bills over winter.
Energy bills will rise by 10% to an average of £1,717 per year for the average dual fuel tariff, paying by direct debit, from today. Even with households expected to cut their gas and electricity bills in response to rising prices by an estimated 15% and 10%, respectively, the ECIU predicts that home energy bills will still be around 55% higher than before the energy crisis began in 2022.
This means that a typical home with an energy performance certificate (EPC) rating of C can expect to pay around £900 for energy across this winter, compared to £580 before the crisis, with less efficient homes paying even more.
If high prices do not end up suppressing demand, the difference is even harsher, with winter energy bills forecast to be around 75% higher than pre crisis levels.
Commenting on the analysis, Jess Ralston, energy analyst at the ECIU, said: “Millions of households are facing higher bills this winter in cold homes that simply leak heat.
Investment in improving energy efficiency through government schemes has dropped over the past decade and fallen even further in the first six months of this year. At a time of energy bill crisis, this makes very little sense. “All eyes will be on the budget to see what investment and plans the government will muster to tackle this and the ongoing energy crisis. Improved efficiency means less gas burnt in boilers and less gas needed from international markets, thereby boosting British energy security.”
Energy crisis continues to bite hard
The impact of the energy crisis has been immense for UK consumers, with rates of energy debt and arrears skyrocketing as a result.
A recent report from the UK’s energy regulator Ofgem revealed that, year on year, energy debt and arrears have risen by 43% to hit £3.7 billion, which includes a 12% rise in the last three months alone.
Policy interventions have thus far failed to improve fuel poverty rates in the UK. The Committee on Fuel Poverty noted that rates have been “flatlining” over the past five years as the number of households in fuel poverty has remained virtually unchanged from previous years.
The UK is taking steps to ensure that this kind of energy crisis cannot be allowed to happen again. The Energy Crisis Commission, an independent group made up of energy experts, has been formed to protect the UK from future energy crises, with members including leading figures from Energy UK, National Energy Action and Citizens Advice, who will make high-level policy recommendations to ensure that the UK can withstand energy market volatility in the future.
Is the government's grand plan to lower household energy bills a heartfelt attempt to win over the public, or just another empty promise, like a politician's promise of 'jam tomorrow'?