Mixed messages as households to see further energy price rise

The Momentum UK Team 17 December 2012

An eight year National Grid upgrade has been approved by Ofgem, resulting in an expected £12 annual increase in household energy bills. The approval from the energy regulator follows an annual report from the Fuel Poverty Advisory Group (FPAG), which argues radical action is to be taken if the UK's poorest households are to avoid further fuel poverty.

The developments will affect the UK transmission networks, with UK households set to subsidise the works. Ofgem has currently earmarked the cost of the project at £24 billion over the next eight years, which previously stood at £31 billion.  However, it has still increased on the initial £22 billion it quoted earlier in July. This amount was criticised at the time by the National Grid for being insufficient.

The engineering works are to maintain and improve many of the UK’s ageing power stations as well as the high-pressure gas network. It also includes the installation of modern electricity lines as well as a new network designed to link England, Scotland and Wales. It is forecasted that the engineering works could create 7,000 jobs.

The decision to levy a proportion of the cost on the public coincides with a statement from the FPAG, suggesting that 6 million UK households are being forced to face colder homes over fears about heating costs this winter.

The report cites fuel poverty as a real threat for a growing number of people every year. Many at risk are the more vulnerable members of society.

Commenting on the report from the FPAG Mike O'Connor, Chief Executive of Consumer Focus, said:

“Current Government plans for energy efficiency schemes are inadequate to deal with the scale of the fuel poverty problem. Millions of older people, families and people with disabilities will be left living in cold homes and struggling to afford their bills unless extra measures are taken.

The rise is set to start at £8.50, eventually reaching £15.10 by the end of the eight year development plan. This means that between 2013 and 2021 homes are likely to see an average increase of £12 per year.