Ros Atkins on why energy bills are rising
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Ofgem, the UK’s energy regulator, has confirmed a further 54 percent increase to the energy price cap coming into effect from 1st April. Standard tariffs will see a rise of £693 per year, bringing the average annual bill to £1,971, while prepayment customers will see an increase of £708 to £2,107 per year. This increase will put further pressure on households already struggling with the ongoing rise in energy prices, caused by the pandemic.
In light of this, Greg Jackson, the CEO of Octopus Energy has called on the Government to move with urgency and slash red tape to build renewable energy capabilities much faster than ever before.
Speaking to Express.co.uk, he said: “We have got to move fast. During the pandemic, we took a 15-year process of creating a vaccine and we did it in less than a year.
“And we did that by slashing red tape. that’s what we need to do now with renewable energy generation.
“Currently, it takes 7 years on average to build a wind farm. We’ve got to learn from the pandemic and build that in a year.
“If we were building renewable generation with the same urgency now, as we did during the pandemic, we could be enjoying cheaper electricity next winter.”
Mr Jackson said that a lot of what slows energy companies down is down to “bureaucracy”
He said: “Things like the National Grid and the Government have to agree that a particular kind of power is needed.
“Well, we know what kind of power we need because we know what our customers are going to use.
“If you let companies choose the power their customers need, then companies get quicker connections to the grid and meet customers needs faster.
“Things like connecting it to the grid quickly so we can bring down prices faster.”
He compared renewable energy to electric cars, which have significantly dropped in price over the past decade.
He said: “Electric cars used to be very expensive. Increasingly they’re becoming closer and closer to the cost of a new petrol car.
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“Within a few years, electric cars should be cheaper to buy, and dramatically cheaper to run than petrol cars.”
The biggest driving factor behind the huge increase in energy bills is the global cost of wholesale gas.
A worldwide squeeze on gas and energy — caused by cold winters, a lack of wind for alternative energy sources and an increase in demand from post-lockdown recovery— has contributed to the issue.
However, the UK is relatively hard-hit because it is one of Europe’s biggest users of natural gas.
Around 85 percent of homes have gas central heating, and it also generates a third of the country’s electricity.
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