Electricity bills could increase by 60% in the next seven years
Electricity bills could soar by a staggering 60% by 2016 if Ofgem's worst-case scenario turns out to be accurate. The rise in price will be due to the £200 billion that will be needed to maintain and restore Britain's ageing nuclear power plants.
Ofgem made the claims in their "Project Discovery" review, which examined a number of possible scenarios for the energy market over the next 15 years.
Admittedly, the 60% rise was the most pessimistic forecast, but even the most optimistic scenario predicted a 14% rise in electricity bills by 2020.
Eco-friendly initiatives will require vast amounts of investment over the next decade if strict climate targets are to be met. In addition to these costs, the energy market will also have to contend with increased volatility in gas supplies, which could have an impact on consumer supplies.
Ofgem also called on the energy industry to help fund research and development into finding reliable, sustainable energy sources for future use.
Another finding of the report was that electricity capacity is likely to fall in coming years as nuclear plants and other electricity power stations close down. This would make the UK more dependant on gas imports, which could give rise to the possibility of energy being used as a political bargaining chip.
Alistair Buchanan, Chief Executive of Ofgem, said that the country faces "a tough challenge in maintaining secure supplies while at the same time meeting its climate change targets." However, he also remarked that he believed there was "still time to act."
Electricity: www.uswitch.com/gas-electricity/
Ofgem made the claims in their "Project Discovery" review, which examined a number of possible scenarios for the energy market over the next 15 years.
Admittedly, the 60% rise was the most pessimistic forecast, but even the most optimistic scenario predicted a 14% rise in electricity bills by 2020.
Eco-friendly initiatives will require vast amounts of investment over the next decade if strict climate targets are to be met. In addition to these costs, the energy market will also have to contend with increased volatility in gas supplies, which could have an impact on consumer supplies.
Ofgem also called on the energy industry to help fund research and development into finding reliable, sustainable energy sources for future use.
Another finding of the report was that electricity capacity is likely to fall in coming years as nuclear plants and other electricity power stations close down. This would make the UK more dependant on gas imports, which could give rise to the possibility of energy being used as a political bargaining chip.
Alistair Buchanan, Chief Executive of Ofgem, said that the country faces "a tough challenge in maintaining secure supplies while at the same time meeting its climate change targets." However, he also remarked that he believed there was "still time to act."
Electricity: www.uswitch.com/gas-electricity/
