British households risk unaffordable energy bills, Ofgem warns

In a wide-ranging report into the future of Britain's energy market, Ofgem said that there is a risk that bills could rise by up to 25pc over the next decade unless measures are taken.
Ofgem said that the unprecedented combination of the global financial crisis, tough environmental targets, increasing gas import dependency and the closure of ageing power stations has combined to cast reasonable doubt over whether the current energy arrangements will deliver secure and sustainable energy supplies.
Speaking on BBC Radio Four, Ofgem's Chief Executive, Alistair Buchanan, said that as a result energy bills could rise by up between 14 and 25pc by 2020. "The higher cost of gas and electricity may mean that increasing numbers of consumers are not able to afford adequate levels of energy to meet their requirements," the report said.
Ofgem argues that leaving the future of the country's energy supplies to current market arrangements and incentives will fail to deliver the £200bn needed to overhaul the system.
The global downturn has added urgency to the need to radically change how Britain generates its energy, the report argues, adding that the requirement to cut carbon emissions means billions of pounds of new investment is needed.
"Our evidence shows that Britain has a window of opportunity to put in place far reaching reforms to meet the potential security of supply challenges we may face beyond the middle of this decade.
"We do not advocate change lightly, but all the facts point to the need for reforms now to provide resilient supply security. Acting earlier will also help keep costs as low as possible for consumers and business.

3rd February, 2010

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