Price rises of 19% on gas bills and 10% on electricity bills announced by UK utility Scottish Power earlier this week could drive more households to invest in energy efficiency measures.
The increases, which the utility blames on wholesale costs, will come into force on August 1 and affect some 2.4 million households.
Energy and Climate Change Secretary Chris Huhne said that while the news will be ‘disappointing’ for customers, it underlines the importance of improving energy efficiency and reducing dependence on fossil fuels.
“The Green Deal will help householders upgrade their homes to waste less energy, and our electricity market reforms will bring on investment in clean energy sources that are not vulnerable to global price shocks,” he commented.
Property expert Jennifer Warner from website Globrix.com says that she expects the price rises will the increase the number of ‘green’ homes. The website has seen the number of properties described as ‘eco’ increase by nearly a quarter in the last year.
“This latest energy price rise will accelerate this as homeowners desperately fight to keep down their bills,” she says.
But the increases could also force more households into fuel poverty this winter, warn consumer groups.
“These price hikes from Scottish Power will be a shock for its millions of customers already struggling with the rising cost of living, and warnings from other suppliers suggest that more bad news is to come,” says Richard Lloyd, executive director of Which?.
“This is yet another example of the Big Six blaming the wholesale energy market for increases to domestic customers’ bills, but energy companies have a lot of work to do to convince consumers that energy prices are fair,” he adds.
The consumer group is calling for an end to the UK market’s complex tiered system and instead wants to see utilities forced to structure energy tariffs so that customers can easily compare like for like.
The announcement will also put more pressure on UK energy regulator Ofgem, which is trying to address what it calls ‘complex and unfair pricing practices’.
For further information:
UK Government reopens Warm Front scheme to help 90,000 households (15-Apr)
UK regulator calls for pricing overhaul to protect customers (21-Mar)
UK Government launches independent review of fuel poverty (15-Mar)
UK households living in fuel poverty rise to 4.5 million (15-Oct 2010)
09 June 2011