Across the UK millions of families and businesses are feeling the economic squeeze.
As anybody who has recently received their bill for last winter will be painfully aware, soaring costs of energy are a huge reason for this.
Shocking new analysis by Bloomberg New Energy Finance for Greenpeace, shows that most of the Big Six energy utilities haven’t been investing money from customer bills in a way that brings energy prices under control and secures a clean energy supply for the UK.
The government’s independent advisors, the Committee on Climate Change, and the energy regulator Ofgem have both pointed the finger squarely at the rising cost of gas as being by far the biggest contributor to increased bills over the last eight years.
Ofgem found that of the £150 increase in the average dual fuel bill between March 2011 and March 2012, £100 was due to the rising wholesale cost of energy, largely driven by the increased price of gas.
We’ve already shown how gas prices (as well as pay for the energy company bosses) have rocketed over the last decade.
This worrying trend is set to continue. The chief executive of Ofgem recently argued that gas could be increasingly expensive to import as countries around the world compete for supplies.
This means higher bills for everyone, unless we can reduce our vulnerability by cutting our dependence on gas.
It also means higher emissions. The government’s climate advisers recently wrote to the energy secretary warning that a new ‘dash for gas’ puts at risk our ability to achieve the carbon emission cuts set out under the Climate Change Act.
But lobbyists for the gas industry want to make us even more reliant on burning gas for power generation.
The new research by Bloomberg has found that since 2006, £13 billion has been spent by the Big Six energy utilities on 14GW of new electricity generating infrastructure, and over half of this has been new gas plant.
While Scottish Power have added 100% of their new capacity through renewables and SSE more than two-thirds, the worst culprits are Centrica, EDF, E.ON and RWE Npower, which added more than two-thirds of their new power capacity through gas. With separate Bloomberg research showing an additional 11GW of gas expected to come on to the grid in the next five years, we will all become increasingly vulnerable to volatile global gas markets unless the government takes decisive action.
To bring bills under control and ensure that we play a leading role in reducing dangerous climate change emissions, it is crucial that the Big Six energy utilities (which supply almost 90% of UK customers and own 70% of national power generating capacity) invest the money we pay them into reducing our dependence on burning gas. That means putting large scale energy efficiency and renewable energy at the heart of their investment plans.
Our new report reveals that when it comes to investing in alternatives to expensive and polluting gas imports, with the exception of Scottish Power, the Big Six have been massively outperformed by new entrants to the UK’s energy market.
In fact, if you have a solar panel on your roof, you’re part of a group of small-scale solar power owners that together own more renewable capacity than any of the Big Six.
When Bloomberg ranked renewable generators in the UK, E.ON and EDF came 6th and 10th respectively. Worst of all has been British Gas owner, Centrica, which finished 12th with just a 2.3% share of UK capacity. This is despite the fact that the company has more domestic customers than any other utility and has consistently made the highest profit margin. Instead of investing to reduce Britain’s reliance on imported gas, or delivering lower bills for its customers, Centrica are profiteering, handing out huge dividends to shareholders whilst letting consumers pick up the tab.
With a shake-up of the UK energy market taking place this autumn, it is vital that the government stands up for hard-pressed consumers and protecting the climate.
To do so they must ensure that energy companies invest in clean, home-grown energy sources, instead of expensive and polluting gas.