Energy chief fears ‘truly horrific winter’ as UK struggles to contain rising energy prices
Image credit: tbc
As much as 40 per cent of the British population could fall into fuel poverty in the autumn, warn the leaders of four of the country's largest energy suppliers, as they called for more government action to ease the cost of living.
Michael Lewis, chief executive of E.ON UK, has warned MPs of the consequences of soaring energy costs once the industry regulator, Ofgem, raises the annual energy cap in October.
“We are expecting a severe impact on customers’ ability to pay,” he told MPs at the business, energy and industrial strategy select committee in parliament, adding that he expected debts of customers to rise by 50 per cent, or £800m.
The industry called for an “unprecedented” intervention by the government before October to reduce the burden of energy bills. ScottishPower's Keith Anderson proposed the introduction of a £1,000 deficit fund or social tariff for vulnerable customers. Other options discussed were removing VAT on gas and electricity, extending the warm homes discount, removing green levies on bills, and targeted discounts for the poorest homes.
“Come October that’s going to get horrific, truly horrific,” said Anderson. “It has got to a stage now where the size and scale of it is beyond what I can deal with, beyond what I think this industry can deal with. I think it needs a massive shift in the government policy and approach towards this.”
In April 2022 alone, the average household dual-fuel tariff has risen from £1,278 to £1,971, and EDF chief executive Simone Rossi said it had seen a 40 per cent increase in calls from customers concerned about their ability to pay.
In order to address some of the causes of the rising energy costs, such as the UK's dependency on Russian fossil fuels, Boris Johnson is expecting to seal new collaborations on renewable energy in India. The Prime Minister will leave on Wednesday to begin negotiations with India's Prime Minister Narendra Modi.
Johnson’s official spokesman said: “We will be looking to secure new partnerships on trade, technology and defence on the visit that will include significant new investment on jobs announcements and science partnership."
Earlier this month, the Prime Minister also set a goal to increase the UK’s offshore wind-generation capacity fivefold to 50 gigawatts by the end of the decade, up from a previous 40GW target, as part of his new “energy security strategy”. However, some of the projects included in this effort have encountered public opposition.
Local communities in Suffolk have recently threatened the UK government with legal action, following business secretary Kwasi Kwarteng's approval of two controversial wind farms to be developed by ScottishPower off England’s east coast. Suffolk residents objected the design and location of the onshore infrastructure needed to connect them to Britain’s electricity grid.
Suffolk Energy Action Solutions (SEAS), a group organised by residents of the county, have sent a 'pre-action protocol' letter to Kwarteng asking for a rethink before seeking permission to apply for a judicial review of his decision to approve the two ScottishPower projects.
Fiona Gilmore, who leads SEAS, said the approach to planning onshore infrastructure such as substations and large cables was currently “very old fashioned” as each project is dealt with individually, without thought to how infrastructure could be integrated and reduced.
Energy executives and some climate campaigners have warned that if not planned carefully, the amount of onshore infrastructure that will be required to speed up deployment of clean electricity projects in Britain could become a new battleground with communities.
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