Blackouts without major investment in energyEnergy bills could rise by 25% over next 10 years
04 February 2010
British households could face power shortages and higher energy bills in the years ahead unless a radical overhaul of the country’s energy supplies takes place.
That's the bleak warning from the energy regulator, Ofgem, which has published its conclusions from a year-long investigation into the energy market.
Ofgem says around £200bn of investment is necessary from power companies - like British Gas, EDF, Eon, Scottish Power, Npower, and Scottish & Southern - to guarantee secure and sustainable energy supplies in the future. As a knock-on effect, consumers’ gas and electricity bills could rise by up to 25% in the next decade.
Energy bills will rise
Speaking on BBC News, Ofgem chief executive Alistair Buchanan said: ‘Given the scale of investment, our bills are going to have to take some of the heat on that.
‘Faced with the unprecedented challenge of carbon prices, the unprecedented challenge of the credit crunch and the unprecedented challenge of maintaining international supplies, we are looking at new solutions to protect security of supply,’ Mr Buchanan explained.
Centralised energy buying
One of several measures proposed by the regulator was the establishment of a government-owned or regulated ‘energy buyer.’ Centralising the buying of energy – a form of nationalisation - instead of leaving it to the energy companies would to an extent represent a remarkable reversal of the privatisation of energy markets since the 1990s.
Other measures included the setting of a minimum carbon price to encourage companies to invest in low-carbon energy infrastructure, such as wind power, as well as requiring suppliers to demonstrate how they would cope with threats to the security of their energy supplies.
Responding to Ofgem’s announcement, Which? chief executive, Peter Vicary-Smith, said: ‘Ofgem’s report has identified a range of measures to ensure we have safe, secure and affordable energy in the future but it also raises the question of who is responsible for deciding which measures to implement and how to implement them.’
‘We urgently need clarity over who is responsible for securing our future energy supplies or vital time and money could be wasted. The Energy Bill is a great opportunity to provide this clarity.’
Lower your gas and electricity bills
You can compare energy prices and switch to a new gas and electricity supplier on Which? Switch. People who switched with us between 1 October and 31 December 2013 are predicted to save an average of £234 a year on their bills.
Which? RSS and Twitter news feeds
For daily consumer news, subscribe to the Which? consumer news RSS feed. If you have an older web browser you may need to copy and paste http://www.which.co.uk/feeds/news.xml into your newsreader.
Follow @WhichNews on Twitter for the latest news, or @WhichAction to see how we're campaigning for consumers.