British households’ electricity bills could rocket 54% by 2020 according to new analysis published today.
As the last winter price rise from Big Six suppliers was announced this week, with E.ON boosting its gas bills 9.4% and electricity bills 7.7 %, analysts reckon even more hikes are on the way.
Electricity bills for UK consumers have risen more than 70% since 2005, largely due to increases in the cost of gas and coal feedstock for fossil-fuel generation.
In future, the average household bill could jump from £454 now to £699 at the end of the decade, predict researchers at Bloomberg New Energy Finance (BNEF).
Broken down, the figures suggest the cost of electricity in pence per kilowatt hour (p/kWh) will rise from 13.34p/kWh to 20.55p/kWh.
Government schemes to help renewable and nuclear energy – such as the Renewables Obligation and the Contracts for Difference – make up 1.84p/kWh of this rise.
In comparison, wholesale gas prices will add 2.04p/kWh to the bill, suggests the paper by BNEF’s European Power Market Insight team, called “Unwrapping British energy bills to 2020”.
Mike Lawn, head of power research at Bloomberg New Energy Finance said: “These electricity price increases will reflect the fact that the UK is transforming its mix of generation, pushing renewables close to 30% by 2020, largely at the expense of coal, and with a greater dependence on rising gas prices. The only way households and businesses can mitigate the impact of higher electricity bills will be by improving energy efficiency.”