Ofgem has looked at the security of the UK’s energy supply and devised four possible scenarios for the coming decade – the worst of which forecasts energy prices for consumers to rise by over 60% by 2016.
The worst-case scenario envisages what may happen if a strong global economic bounce back from the recession takes place but the UK misses its renewable energy and carbon targets.
With economic growth breeding strong competition between countries for gas – an energy resource Ofgem says the UK is becoming increasingly reliant on – the cost of gas would be driven up. Assuming no new nuclear power capacity arrives before 2020, the watchdog forecasts prices rising by more than 60% by 2016, before reducing.
The other three scenarios all foresee lower price rises, between 14% and 25%. All depend either on the UK’s economic growth being slow, or on its investment in ‘green measures’ being high.
Whatever the future, Ofgem says an investment in infrastructure of up to £200bn is needed.
Which? slams ‘negligence’
Which? energy campaigner Dr Fiona Cochrane says: ‘We can’t allow a situation where we have to choose between paying a king’s ransom for our energy or face the lights going out. The way consecutive governments have passed the buck on this issue is tantamount to negligence.
‘By ignoring security of supply for so long, they’ve saddled consumers with what could be a colossal bill. It’s good that Ofgem has finally looked at this issue but what is needed now is quick and decisive action to ensure that consumers have safe, secure and affordable energy.’
Saving energy and money
Alison Morrison of Which? Switch, Which?’s independent energy comparison and switching site, says that ‘consumers need to see that any price rises are related to the real costs that energy companies pay – and not simply an opportunity for energy companies to increase profit.’
Which? Switch can save households an average of £257 a year on their energy bills. Which? Switch shows you the customer satisfaction scores of suppliers; our has all the details.
We’ve also tested key products that could save energy in your home, from energy-saving light bulbs to the most cost-effective boilers.
Our advice on being energy efficient in your home ranges from how to get a good boiler service and a guide on how to cut energy costs.
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