Energy Bills for UK Households May Jump to £500 a Month
………..As Russia squeezes gas supplies
Reports say Britain runs the risk of blackouts this December if it needs to source gas supplies from European networks.
UK’s annual energy bills for a typical household is put at £1,971 but the forecast is that this may jump to £3,420 when the price cap on most tariffs is updated in October, and again to £3,850 in January.
In its winter outlook, the National Grid said buffers remained good against blackouts but the Russian threats of a shutdown of supplies would push up prices. “There are risks and uncertainties this winter as a direct result of possible shortfalls in Europe’s gas supply,” the report said.
“Britain is not reliant on Russian gas to the extent that the rest of Europe is, it is clear that the cessation of flows of gas into Europe could have knock on impacts, including very high prices.”
This prediction, reports say, comes as Europe’s natural gas prices on Wednesday were approaching their highest since the war in Ukraine began on February 24 after Russia slashed supplies to its western neighbours.
Benchmark gas contracts were trading at €216 ($219) a megawatt hour, up 9 per cent, after deliveries through the trans-Baltic Nord Stream pipeline were cut to 20 per cent of capacity.
Many British households will be pushed into fuel poverty, where energy bills consume more than 10% of income, unless the government significantly increases the help on offer, says energy consultancy BFY, adding an average customer will face “a bill of £500 in January alone” as UK households typically use most energy in winter.
The continued rise came despite members of the EU agreeing last Tuesday to cut their gas consumption by 15% this winter, although a number of opt-outs were negotiated into the package.
Prices were up by almost a fifth in a week and not far off their wartime high in March, as “persistent concerns about tightening European supplies continued to hang over the market”, Trading Economics said in a market summary.
“Russia’s natural gas weaponisation also sparked a rush for supplies from other main buyers, including Japan and South Korea, which are moving through with plans to buy more LNG cargoes for the winter,” it said.
Russia’s state owned gas exporter, Gazprom, said this week that deliveries through Nord Stream would be cut from Wednesday because of ‘technical problems.’
But European officials regard this explanation as spurious and accuse the Kremlin of trying to increase prices and undermine the continent’s unity by withholding gas.