Energy prices rocket to new high amid global gas crunch –

National Grid ESO, which balances supply and demand in Britain, is required to make sure it always has spare power capacity – known as margin – to cope with any unplanned outages. 

Analysts expect margins to be relatively tight this week, potentially adding to pressure on prices as generators hold out for a higher price.

Mr Lewis said: “How can we increase that margin? It can’t come from interconnectors [power cables to the Continent] as they are scheduled to maximum. We can’t magic generation from anywhere. 

“The only thing is if we can loosen demand. That is possible – businesses and factories that have their own on-site generation are able to turn that on to reduce demand on the grid.

“Typically they would only do that in a winter period but at these prices I would expect they should be doing so, but it would depend on their route-to-market provider.”

The immediate impact of the price rises will fall on businesses rather than households, many of which are protected by a price cap on their bills.

This is set every six months by Ofgem, the energy regulator, based on average wholesale prices.

This current market turmoil will be reflected when the price cap is reset in April. Consumers face the prospect of a very significant rise unless wholesale costs fall dramatically in coming months.

Dame Clare Moriarty, chief executive of Citizens Advice, said: “It’s deeply concerning that energy prices are continuing to rise, meaning we’re likely to see yet another hike in bills next year. This will dismay customers already bracing themselves for the increase coming next month as the energy price cap rises.” 

Stephen Murray, energy expert at MoneySuperMarket, said: “Unfortunately higher energy prices will be a reality for most of us throughout the winter months.” 

Lisa Barber, home products and services editor at Which? said: “While customers on default tariffs will be protected from further increases to their bill until the next price cap review, those on other variable tariffs may see their bills increase and the number of cheap tariffs on the market will likely continue to disappear, if the wholesale price of energy continues to rise. 

“Switching energy providers is the best way to save on energy bills and customers should consider choosing a fixed tariff to keep their bills stable.” 

The Government has urged people to shop around for cheaper energy deals. It is also extending the Warm Home Discount and plans to trial automatic switching.

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