Energy bills: Consumers to feel squeeze

Rising energy bills are just one of the household expenses that are currently putting a squeeze on consumers’ budgets.According to the latest figures from the Department of Energy and Climate Change (DECC), one in ten households are in fuel poverty, with these consumers facing a staggering £438 gulf between their bills and the amount they can afford to put towards them.

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This gap has risen by £200 over the last ten years, despite the government ploughing £20 billion into measures to reduce fuel poverty between 2000 and 2008 and £11 billion between 2008 and 2011.The government has also pledged to bring an end to fuel poverty by 2016 (2018 in Wales), however, the Energy and Climate Change Select Committee has argued that the government is unlikely to meet this target. So it seems that the future looks less than bright for consumers and their energy bills. Here are just some of the energy bill concerns currently facing consumers.

Gas and electricity costs could soar by up to 10% over the next couple of months, if the UK’s leading energy suppliers hike up their rates ahead of the winter months. If this scenario is realised consumers in the UK could face having an additional £142 added to their annual energy bills.The predicted rise comes at a time when further figures have revealed that the ‘Big Six’ energy firms (British Gas, E.ON, EDF, npower, Scottish Power and SSE) have collectively amassed £3.3billion in profits since the general election – a fact that Labour says means that the government is not taking enough action to tackle energy firm profiteering.

Could Scots be set to face the highest energy bills in the world?

Speaking to Scotland on Sunday, Sir Donald Miller, former chairman of both the South of Scotland Electricity Board and of ScottishPower, called the SNP’s current energy policy to produce 100% of Scotland’s energy needs as “disastrous”. However, the lack of availability of wind power could lead an independent Scotland to have to import energy from England, and result in Scots facing the highest energy bills across the globe. Sir Donald points to the example of Denmark, which produces a large share of its energy from wind and has to import energy at premium prices from Norway. This has resulted in the country having the highest household bills in the world; around 70% more than those in the UK. Sir Donald said: “Independence with present energy policies would be disastrous for Scotland.

It would be even worse than the Denmark situation.”He added: “So long as the nuclear stations at Hunterston and Torness are operational Scotland might just about muddle through, but without them would be reliant on energy coming from England. It would be importing energy back when the wind is not blowing strongly enough, and that would be for most of the time.”However, First Minister Alex Salmond has argued that an independent Scotland would become the “Saudi Arabia of renewables”. Multi-billion pound insulation scheme could push up energy bills.

A £3 billion insulation scheme, which requires energy firms to offer free insulation in poorer areas, could act to drive up consumers’ energy bills.Sam Laidlaw, boss of British Gas-owner Centrica, argued that he doesn’t think “any company can absorb these costs” while going on to say that these costs will need to be passed on.

He said: “Ultimately these are costs that have to be passed through and that’s the position that any energy supplier would be in.”Energy analyst Peter Atherton, of Liberum Capital, argued that the scheme will be good news for some but bad news for others.“If you live in a council house and get your home upgraded, the scheme is great news,” he said.“But if you’re the next door neighbour who has bought your council house and has a limited income, not only will you not get an upgrade but you’ll be paying for your neighbour’s upgrade through your higher bills.”

Posted by: Samantha Turner-Meyern Categories: Environment, Finance, Industry News, Latest News, Uncategorized Tags: , , , , , , Comments Off on Energy bills: Consumers to feel squeeze

0 Responses to Energy bills: Consumers to feel squeeze

  1. avatar Silver Price says:

    UK Energy Secretary Ed Davey has claimed it is logical to assume that energy bills will rise “significantly” for Scottish families after independence if the burden of paying for the country’s renewable sector falls upon consumers north of the Border.