With families struggling this winter and bills set to rise next year, it seems bizarre that Jeremy Hunt decided not to even fulfil his manifesto commitment on insulating homes.
Gas is set to add £4,400 to the average household’s energy bills since the gas crisis began until the end of the current Energy Price Guarantee (EPG) in April 2024, new analysis from the Energy and Climate Intelligence Unit (ECIU) shows.
Jeremy Hunt, the chancellor of the exchequer, announced in the Autumn Statement that the EPG will see the average household pay £3,000 or an increase of £500 from its current level for energy bills for the year from April 2023. This is around three times the pre-crisis energy bill.
The analysis shows that the average household will pay £3,212 more because of the gas crisis, with the UK Government covering the remaining £1,181 under the EPG.
High wholesale gas prices are predicted to add £2,499 to gas bills between the start of the crisis and the end of April 2024, while the additional expense of running gas power stations is set to have inflated average electricity bills by around £1,895.
Jess Ralston, a senior analyst at ECIU, said: “As the chancellor said, this gas crisis is costing the country the equivalent of a second NHS.
"With families struggling this winter and bills set to rise next year, it seems bizarre that Jeremy Hunt decided not to even fulfil his manifesto commitment on insulating homes.
"Given the high cost of living, many homes may lack the cash to pay for upgrades leaving them and the country exposed to the volatile international gas market.”
Renewable electricity generation has effectively resulted in more than 27TWh of gas not needing to be burnt in power stations so far this winter, according to ECIU’s Winter Power Tracker. This is equivalent to the gas needed to heat more than 2.9 million homes over the winter or more than 30 LNG tankers.
Recent government ‘Contracts for Difference’ auctions secured 11GW of new wind and solar at around a fifth of the current price of gas power generation including 7GW of offshore wind at record low prices of £45/MWh.
As part of the Contracts for Difference scheme, renewables are due to pay back £730 million in quarter four 2022. Savings would be even larger if onshore wind and solar were deployed more fully. Further, polling shows that 77 percent of the public support wind and solar project, even when proposed in their local area.
Previous ECIU analysis has shown that installing insulation to meet the government’s target of as many homes as possible reaching EPC C by 2035 would cut imports by three times more than gas from ‘already approved’ North Sea fields over the period 2030-2035.
From April 2023, 8.6 million households are expected to be pushed into fuel poverty while the £6 billion newly announced funding for energy efficiency is not expected until 2025.
Brendan Montague is editor of The Ecologist. This article is based on a press release from the Energy and Climate Intelligence Unit.