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Electricity prices are on track to rise by a fifth over the next four or five years, according to Britain’s biggest energy supplier.
Rachel Flather of Octopus Energy tells MPs He Government Urgent consideration should be given to changing how wholesale gas prices drive UK energy costs to help British households.
energy During the Energy and Net Zero Select Committee session, bosses also blamed “complex rules” for higher wholesale energy prices in the UK than in some other European countries.
The warnings come two weeks after the energy price for a typical household England, scotland and an increase of 2% in Wales.
The average household paying for gas and electricity by direct debit has had its energy bill rise from £1,720 to £1,755 a year.
On Wednesday, Ms Fletcher, director of regulation and economics at Octopus Energy, said attention needed to be paid to calculating gas prices in the UK wholesale energy market.
He said: “There are proposals on the table that we think the government should consider taking gas out of the wholesale market and keeping it in a strategic reserve.
“I think this needs to be looked at very seriously and urgently.
“If we continue on the path we are on now, there is every possibility that electricity prices for a typical customer will be 20% higher in four or five years than they are now, and that is even if wholesale prices halve.”
Meanwhile, EDF UK chief executive Simon Rossi called for the UK to reduce regulatory burdens to help lower energy prices.
He said: “The issue is that the bills are very high and there are things we can do to reduce them.
“From the point of delivery, the cost of serving customers in the UK is about £100 a year, and in France it is 45 euros, about half that.
“This is not related to wholesale price or gas marginal cost, but is driven by the fact that we have a very complex regulation that has become more sophisticated over the years.”
A spokesperson for the Department for Energy Security and Net Zero said: “We categorically reject this speculation.
“The cost of wholesale gas to homes is 75% higher in 2022 than before Russia invaded Ukraine, and the main reason is energy bills remain high.
“The only way to lower energy bills forever is to make Britain a clean energy superpower, freeing the UK from the ups and downs of fossil fuel prices and relying on clean, domestic electricity we control.”