Energy bills: NHS chief warns of 'more deaths' due to the cold
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With the price cap energy bill tipped to reach £6,000 in April, Mr Kwarteng is looking to take on the wind and solar energy companies making massive profits. According to a new analysis from the energy consultancy Auxilione, the energy price cap will reach £3,576 this October, and then rise to £4,799 by January. The analysts noted prices would not fall until July next year, after which the cap would reduce to £5,486, still about triple the current levels.
With the energy bills reaching unaffordable levels for millions of households, Mr Kwarteng is reportedly preparing to intervene in the energy market, in a bid to stabilise the “crazy” profits made by renewable energy companies.
About a third of the wind and solar energy producers are currently on inflexible legacy contracts, and as a result, they have generated billions because of the high price of electricity.
As technology improves, renewable energy generation has become cheaper than natural gas and oil, and that disparity has grown even more since Russia’s invasion of Ukraine sent gas prices soaring.
According to the Telegraph, Mr Kwarteng is looking to offer the companies a favourable fixed-term rate at which to sell energy to suppliers for 15 years if they agree to stop selling cheap renewables at high wholesale prices.
Ministers have faced pressure from Tory MPs, who argue that green companies have made massive profits because of the high price of electricity and low cost of generation.
MP Danny Kruger has pushed to end the legacy Renewable Obligation (RO) contracts, calling them “the biggest avoidable driver of inflation we have” and urging ministers to “move as fast as possible to change the rules”.
According to the Telegraph, the firms on older contracts, which were signed between 2002 and 2013, have raked in billions.
These companies will now be offered deals that pay a fixed rate for power.
If these companies refuse to switch, some will continue to be on variable rate contracts until 2037.
However, according to Government sources, such a deal would “help with financial planning and investment decisions” in the long run, while also bringing prices down for the rest of the country.
Despite the fact that renewable energy is cheaper to generate, even consumers with 100 percent renewable tariffs have seen their bills soar.
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This is because, under current market structures, the price of electricity from renewables is tied to the price of gas, which is rising due to Russia’s invasion of Ukraine.
Ministers are reportedly considering severing the link between the prices of gas and electricity for consumers, in their latest attempt to tackle the energy crisis.
Despite the fact the UK generates about a quarter of its electricity from renewable sources, bills have skyrocketed, with many blaming this link between the price of gas and the price of electricity.
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