UK’s biggest energy supplier Octopus Energy’s Rachel Fletcher told MPs that the Government should urgently consider changing how wholesale gas prices drive changes in UK energy costs in order to help British households
Electricity prices are set to skyrocket by a fifth over the next four or five years, warns Octopus Energy, the UK’s largest energy supplier. Rachel Fletcher of Octopus Energy urged MPs to urgently reconsider how wholesale gas prices influence changes in UK energy costs, in a bid to aid British households.
During an Energy and Net Zero Select Committee session, energy chiefs also pointed fingers at “complex regulations” for the UK’s higher wholesale energy prices compared to some other European countries. These warnings follow a 2% increase in energy prices for a typical household in England, Scotland, and Wales just two weeks ago.
The average household’s energy bill, paid by direct debit for gas and electricity, has risen from £1,720 to £1,755 per year. On Wednesday, Ms Fletcher, director for regulation and economics at Octopus Energy, suggested that the calculation of gas prices within the UK wholesale energy market needs scrutiny.
She stated: “There are proposals on the table we think the Government should be looking at to take gas out of the wholesale market and put it into a strategic reserve. I think that needs very serious and urgent consideration. If we continue on the path that we are on right now, in all likelihood electricity prices for a typical customer are going to be 20% higher in four or five years’ time than they are now, and that’s even if wholesale prices halve.”.
Simone Rossi, the boss of EDF UK, has urged the UK to lighten regulatory burdens to help bring energy prices down, as per Plymouth Live. He stated: “The point is that bills are very high and there are things we can do to reduce them.
“From point of delivery, the cost of serving customers in the UK is about £100 per annum, and in France it is 45 euros, so more or less half. This is not to do with wholesale price or gas marginal costs but is driven by the fact we have a very complex regulation which has become more sophisticated over the years.”
However, a spokesperson for the Department for Energy Security and Net Zero dismissed this speculation, stating: “We categorically reject this speculation. Wholesale gas costs for households remain 75% higher than they were before Russia invaded Ukraine in 2022, and the main reason energy bills remain high.
“The only way to bring down energy bills for good is by making Britain a clean energy superpower, which will get the UK off the rollercoaster of fossil fuel prices and onto clean, homegrown power that we control.”