Ofgem predicts 60% energy price rise

October 9, 2009

Today Ofgem, the Office of Gas and Electricity Markets, predicted energy price rises of up to 60% by 2020. They published a consultation document showing four possible scenarios for the next 10-15 years. They pointed out that many of our power stations are worn out and will have to be closed during that time; that we will have to buy more and more gas to generate electricity, and buy it from abroad as the North Sea is rapidly running out; and that wind power is not the answer since it is intermittent and only generates energy when the wind is blowing. Even if new nuclear stations are built, they cannot be ready in time to fill the gap. Every consumer will be hit in the pocket and fuel poverty will affect more people. £200bn will be needed to bring our electricity infrastructure up to date, and it is consumers who will have to pay.

Do we just grin and bear it with typical British resolve? There is not a lot we can do to affect world energy prices, but every one of us can do something about how much energy we use. I believe that the government should have brought in a scrappage scheme not for cars, but for central heating boilers. Consumers would get a subsidy to replace old-fashioned inefficient boilers, they would get lower running costs, plumbers would get more work, British boiler manufacturers would get more work and the country would  import less gas. A simple win-win situation – though obviously too simple for the politicians! Meanwhile, even without a subsidy, every consumer can consider better insulation or a new boiler. The more energy goes up, the more money you save. Unlike renewables, insulation works to save you money 24/7 whether or not the sun is shining or the wind is blowing. Seems obvious to me, but am I missing something?