Standard content for Members only
To continue reading this article, please login to your Utility Week account, Start 14 day trial or Become a member.
If your organisation already has a corporate membership and you haven’t activated it simply follow the register link below. Check here.
Industry analysts have predicted that the price cap on default tariffs will rise to £2,980 when the next period begins in October.
This would represent an increase of more than £1,000 – or 51% – over the current record-high level of £1,971.
Cornwall Insight forecast that the cap will rise further still to £3,003 when the new quarterly periods come into force on 1 January 2023.
The consultancy said the expected increases are primarily led by rising wholesale gas prices, which have soared in response to the uncertainty surrounding flows from Russia into continental Europe.
While the firm is still forecasting a drop in the cap for next Summer, its predictions have risen in absolute terms across all periods over the past few weeks.
The consultancy said the figures do not include the impact of the government’s plans to provide a £400 discount on energy bills to all domestic consumer in October.
Craig Lowrey, principal consultant at Cornwall Insight, said the respite offered by the one-off grant is “not an enduring solution”.
He added: “Our predictions say high bills are to last for at least the coming 12 to 18 months – what will happen in January or April 2023 when the extra funding is not available?
“Longer-term solutions, including increasing energy security through investments in renewables, will lead to the UK becoming less reliant on energy imports – subsequently meaning the volatile wholesale market will have a lower impact on UK bills. Of course, this is of little comfort to those struggling right now.
“In the shorter-term we need to see a review of funding to support those in fuel poverty, with help targeted at those who need it most, whether this be through a social tariff, support for those on pre-pay meters or other direct policies. Of course, a reduction in the demand side with funding for housing insultation and smart meters could also help to lower bills.”
Utility Week’s Energy Reset report details the views of industry leaders and independent experts on how best to reform the market to offer support for those who need it most. Download the report for free here.
Please login or Register to leave a comment.