ENER Britain Faces Another Energy Shock as Bills Set to Surge 42%

[jward]

Britain Faces Another Energy Shock as Bills Set to Surge 42%

• Ofgem CEO gives stark warning to UK lawmakers on energy crisis
• 12 million households could be plunged into fuel poverty

Why Blackouts are Coming This Summer
By
Rachel Morison and
Ellen Milligan
May 24, 2022, 6:38 AM CDTUpdated onMay 24, 2022, 9:17 AM CDT

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British consumers will face another sharp jump in their power and gas bills just before winter, adding to surging costs of almost everything from food to petrol.

The energy price cap is likely to soar to a record £2,800 ($3,499) in October, Ofgem Chief Executive Officer Jonathan Brearley told a panel of lawmakers on Tuesday. That will send about 12 million households into fuel poverty just as heating demand starts to pick up with the cold weather setting in.

The surge will pile even more pressure on Chancellor of the Exchequer Rishi Sunak to help consumers struggling with the worst squeeze on living standards since the 1950s. Even with the £9 billion of assistance announced so far, it won’t be nearly enough to ease the burden with inflation rising to the highest in 40 years.
Brearley will write to Sunak to warn him of the impending increase of more than £800 to annual bills for about 22 million households. The hike means that “more is needed” and Ofgem is calling on the government to increase support to customers, Brearley said.

There are about 6.5 million households in fuel poverty currently, but that may double after the October hike, he added. About a quarter of consumers are already in debt on their energy bills, according to price comparison website Uswitch.

That makes Sunak’s choice over whether to introduce a windfall tax on the profits of energy firms to raise money to support consumers all the more important. Pressure has been growing on him and Prime Minister Boris Johnson to enforce the levy, but many ministers on the government have openly opposed such a measure saying it will deter investments.
Sunak has asked officials to prepare plans for a possible levy on power generators as well as oil and gas producers. No decision has been taken yet, two people familiar with the matter said, asking not to be named


Also read: UK Utilities Plunge on Reports Sunak Working on Windfall Tax
Sunak “is instinctively against a windfall tax but if he feels that extraordinary times call for extraordinary measures then that’s up to him,” Business and Energy Secretary Kwasi Kwarteng told lawmakers in parliament on Tuesday. He said the government should be focused on growing the economy in order to help with energy costs.
Kwarteng said that they may be an announcement “soon” on expanding the government’s warm-home discount program that helps lower-income households, declining to give further details.
“The sheer scale and depth of Britain’s cost-of-living crisis means the government must urgently provide significant additional support,” said Jonny Marshall, senior economist at think-tank Resolution Foundation.

Income Squeeze
Britons are facing the second-worst year on record for living standards
Source: Bank of England

Note: Total available household resources deflated by the consumer expenditure deflator

Suppliers Collapsing
More than two dozen energy suppliers have collapsed since August as wholesale energy prices surged. Most of those firms, some with just a few hundred customers, were the result of a deregulation of the market that allowed just about anyone to set up an energy supply company. Bill payers will ultimately be saddled with the burden.
Both Brearley and Ofgem’s previous head Dermot Nolan, also responding to questions from lawmakers on the panel, expressed regret for not doing more to help both suppliers and customers alike.

“There are significant lessons to be learned from this crisis and change is absolutely needed to the way we regulate the retail market,” Brearley said. “The price changes we’ve seen in the gas market are genuinely a once in a generation event not seen since the oil crisis in the 1970s.”
— With assistance by Andrew Atkinson
(Updates with details in the 9th paragraph.)


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Britain Faces Another Energy Shock as Bills Set to Surge 42%

British consumers will face another sharp jump in their power and gas bills just before winter, adding to surging costs of almost everything from food to petrol.

www.bloomberg.com

 

[Housecarl]

They wanted to "go green", that's what happens...

 

[ShadowMan]

I wonder how an "Earthship" type design would work in the UK? Strawbale with it's super insulation factor would also be a good choice. Not sure how it would deal with their wet weather.

What I'd really like to do here on the mountain where I live would be to build a "Hobbit Hole". Cooler in the summer, warmer in the winter and nothing to burn in a wild fire (hopefully).

 

[Melodi]

The problem is there are parts of the UK where most Winters, most people can get by without much heating. However, there are other parts, especially in the North of England, Scotland, and the mountains of Wales (and Northern Ireland) where people will simply freeze to death if they don't have any sources of heating.

You can really see this when you travel from Southern England (London and the burbs or further South) up into Northern Yorkshire or better yet crossing the Scottish border.

In the South, you get leaking B and B's and plenty of older homes with single-pane windows, barely working radiators, luke-warm "hot" water, and drafts coming in from everywhere. As soon as you get into Scotland, you get the typical "Northern European" double and triple glazed windows, working and efficient heating systems, well-insulated homes, and buildings,, and plenty of hot water.

The reasons are simple, in Southern England and most parts of the Irish Republic, leaking, chilly, windspeed, barely heated homes (especially for those on lower incomes) are usually survivable.

That simply isn't true in much of Northern Europe including Scotland, so when the old traditional forms of heating were replaced by modern heating systems, the houses, public buildings, and businesses were upgraded because they had to be.

I point out that the United Kingdom Government is in London which is far enough South that usually people don't die in their chilly old "flats" and that wealthy people like Members of Parliament can afford to weatherize their homes. The average person in London simply can't, they don't have thousands of pounds to do so and many people rent and their landlords can't afford that sort of money either.

My guess is that the UK government will either start subsidizing the costs of energy or be removed from office when the elderly and the babies start dying this Winter and they know it. There is no good answer to this one - what should have been done long ago was not, and now the consequences are here.