Domestic Energy Bills Set to Double Over Next Five Years
By Laura Elahi on January 13, 2011
On Tuesday, E.ON, one of the largest energy providers in Britain, followed in the footsteps of several other energy firms by raising the price of gas and electricity. Although the price hike by German-owned E.ON was hardly unexpected considering the actions of rival firms, the increase hid a more shocking reality: energy bills are set to double every five years from now on.
E.ON’s 4.3 million or so customers can expect an initial rise of nine per cent on electricity bills and three per cent on gas central heating, translating to an additional £62 on average per dual fuel customer over the year.
Unfortunately, the rise represents the tip of the iceberg according to analysts at Unicredit banks, who are reported to have said: “A typical UK energy bill could rise from the current level of £1,000 per year to over £2,000 per year by 2015. As investment occurs, bills could double every five years until 2020.”
The experts added that Britain’s switch to green energy production will make the greatest impact on domestic fuel bills, with a proportion of the cost of building nuclear power stations and wind farms destined to be passed on to customers.
News of future price hikes will deeply concern many energy users in the UK who are already struggling to pay their fuel bills after one of the coldest ever Decembers on record. Homeowners can go some way towards mitigating the severity of increased energy prices by ensuring that their homes are energy efficient. Double glazing, loft insulation and cavity wall insulation can significantly reduce the amount of heat that escapes the home, meaning that central heating systems can be used less frequently. Installing energy efficient boilers or underfloor heating can also improve energy efficiency in the home.
According to uSwitch.com, the average dual fuel bill paid annually by E.ON customers will rise to £1,249 from £1,187. The leading energy firms, including E.ON and British Gas, have insisted that the rises are necessary to absorb rises in wholesale fuel costs and other factors. TheEnergyShop.com, however, has suggested that the energy suppliers are merely protecting their profit margins after increasing fuel bills by more than 200 per cent over the past few years.