It is no secret that domestic energy prices are likely to rise over the coming years, as a combination of general supply and demand issues affecting fuel and the post-recession drive for investment in green energy technologies conspire against consumers. Unfortunately, as mentioned in previous posts, many of the wholesale fuel costs – and none of the savings – are passed on to domestic energy consumers, whose annual bills are growing higher each year.
Following Ofgem forecasts of energy bill increases up to 60%, recent news of further rises will likely anger many consumers. Indeed, outrage will undoubtedly ensue as the current UK Government is reportedly planning to subsidise the building of several new nuclear power stations through further taxation of electricity customers.
Nuclear power is a key component of the green energy strategies outlined by both the Conservative Party and the existing Labour Government. Unfortunately, building nuclear power stations is a multi-billion pound endeavour that energy companies are generally reluctant to shoulder themselves. Indeed, ministers have become increasingly concerned over failures to commit to nuclear investment by leading energy companies such as E.ON and EDF Energy, who argue that current energy prices make such investment unaffordable. Of course, according to Ofgem’s forecasts, all options lead to increased domestic energy bills and it has already been established that lower wholesale fuel costs are resulting in enormous profits for energy companies at the present time.
Nevertheless, it would seem that regardless of which party is successful at the next UK General Election, nuclear reactors will be built in Britain for the first time in over 20 years. The question is how much of the costs associated with such development will be shouldered by consumers? Unfortunately, in the case of the current UK Government’s initial plans, the so-called nuclear tax would add £44 to an annual electricity bill of £500.