Householders have been warned that energy bills could rise by almost 50% over the next six years as EDF became the latest big six supplier to announce inflation-busting gas and electricity price increases.
A new report from the government spending watchdog, the National Audit Office, also stokes the price row by claiming that ministers “do not know” whether power bills will be affordable in years to come, as multibillion pound infrastructure investment pushes up tariffs.
The report says: “The available projections suggest that increases in both energy and water bills will continue to outstrip inflation, on average, up to 2030.”
The warning came as EDF unveiled plans to raise prices by 3.9% from January with a proviso – described as blackmail by critics – that the increase would be more if green taxes were not lifted by the government. EDF is building the £16bn Hinkley Point nuclear plant in Somerset, a government-underwritten project whose cost will eventually be passed to consumers.
Vincent de Rivaz, chief executive of EDF in Britain, justified the rise and insisted his firm would be seen as a “force for good” for the UK in the long term.
But the biggest shock on Tuesday came at the UK’s annual energy industry conference, where Angela Knight, a former Tory MP and bank spokeswoman who is now chief executive for trade body Energy UK, revealed that new research from investment bank UBS predicted energy prices would rise by 46% in the years to 2020.
This meant that prices have increased by 260% since 2004, according to UBS analysts who blamed a history of inadequate investment and social and environmental policies. UBS referred to an annual domestic bill of £1,100 but many consumers are already paying £1,500 which could mean a rise to well over £2,000 by 2020.
Knight said energy companies had made some mistakes but were being unfairly blamed for much wider issues. “The industry has become a lightning conductor for the general concern about the cost of living. As a result we stand accused for things that we do, for things that we don’t do, for things that we are responsible for and things that we are not … this is not an understood industry,” she said.
Knight argued that the UK still had the lowest gas price in the EU and among the lowest electricity costs. But she said the “old trilemma” of decarbonisation, energy security and affordability meant there was relentless upward pressure on prices.
Guy Johnson, a director at RWE npower, a member of the big six, said he believed that energy security was more important than either affordability or decarbonisation.
Ed Davey, the energy and climate change secretary, warned attendees at the conference that the latest round of bill rises “have not been fully and openly justified.”
However, the NAO has put further pressure on the government to intervene with a damning report saying there is little understanding in government of the financial implications of its own policies to bring much needed investment into energy, water and telecoms.
The NAO recommends the Treasury should publish the expected overall impact on consumer bills, to promote transparency and debate about new infrastructure. It also argues departments should consider the implications for consumer bills and their overall affordability before making policy commitments on infrastructure.
Amyas Morse, head of the National Audit Office, said: “Government and regulators do not know the overall impact of planned infrastructure on future consumer utility bills, or whether households, especially those on low incomes, will be able to afford to pay them. It seems critical to know ‘how much is too much’, based on reliable information.”
Davey also used the conference to renew his attack on Ed Miliband, describing the Labour leader’s proposal to freeze energy prices as “intellectually bankrupt”. The energy secretary said he remained convinced the government should not intervene in prices. “This will have a huge detrimental impact on the investment we need to deliver secure energy supplies. And an investment squeeze would mean a huge black hole in Britain’s energy security – risking blackouts and higher prices in the long run,” Davey said.
Commenting on EDF’s warning on green levies, the director of the Association for the Conservation of Energy, Andrew Warren, said: “It is absolutely disgraceful that a company that is majority owned by another government should be seeking to blackmail the UK government into changing its established policy to require energy companies to help customers stop wasting money by wasting fuel.
“There has been no increase whatsoever in the levels of social obligations placed upon the big six this year. This concerted attack on the energy company obligation by the big six is predominantly a distraction technique to draw attention from the price gouging they are practicing.”
• This article was amended on Wednesday 13 November 2013 to insert a quote from the report.
- Bills back to normal after finally returning home
- Snow problems! Bills set to host Browns despite stadium damage
- The Latest: Clinton warns voters of perils of loose talk
- NFLPA warns agents about proposed bill that could cost injured Saints
- Bills show uncommon resiliency in first-game win
- Gophers defense fuels offense in in 4-2 win over Notre Dame
- Vanuatu says it may sue fossil fuel companies and other countries over climate change
- Elite road cycling technology may benefit amateur consumers
- Manning warns teammates not to let chance slip by
- Rex Ryan compares Bills defense to 2000 Ravens, 2009 Jets
- Brad Keselowski wins in Vegas as Dale Earnhardt Jr. runs out of fuel
- NFLPA warns agents about Saints-backed bill
£2,000 fuel bills on the way, consumers warned have 938 words, post on www.theguardian.com at November 12, 2013. This is cached page on VietNam Breaking News. If you want remove this page, please contact us.