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The government is thought to have saved around £260 million on the cost of the Energy Price Guarantee because of the abnormally mild weather in October.
This is according to BFY Group, which estimates that while in a typical year the scheme would have cost £2.94 billion to implement throughout October, the actual sum was likely to have been around £2.68 billion last month.
Dr Gemma Berwick from BFY told Utility Week the figures highlight the importance of focussing on energy efficiency and demand reduction.
Temperatures last month were around 1.27C above average levels for the season, which BFY estimates resulted in a 6 terawatt hour (TWh) reduction on domestic gas consumption (from the typical 32.7 TWh demand). As well as the £260 million saving from the public purse, BFY believes there was a £600 million saving to households – equating to £17 per household.
Berwick told Utility Week: “This is just one month but if you map that over the six months of the Energy Price Guarantee that would add up to a significant saving for the government.
“While it obviously can’t control the weather it could definitely do more to reduce consumption and promote energy efficiency measures.
“This all feeds into the wider energy strategy and seems to have no real downsides for government.”
Asked what she would like to see the government doing, Berwick said: “It’s about education for the consumer and monetary support for energy efficiency measures. Both are really important but at the moment you have a captive audience so the message has to come now. People can’t afford to ignore it so it’s a golden opportunity.”
BFY’s analysis follows a report from Goldman Sachs this week, which suggested the falling price of wholesale gas could shave £5 billion off the cost of the Energy Price Guarantee over its duration.
The group predicted that benchmark European gas prices will continue to fall from the current level of €125 per megawatt hour to €85 at the start of next year – down from €300 in August.
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