Britain's biggest energy supplier, Octopus Energy, has warned MPs that household energy bills are likely to rise by 20% over the next four years, even if wholesale prices fall sharply. The warning was made by Rachel Fletcher, Octopus's director for regulation and economics, during a select committee hearing on Wednesday.
Fletcher attributed the projected increase to rising 'non-commodity costs', which include levies for upgrading gas and electricity networks, running the energy system, and subsidising low-carbon power projects. She called for 'serious and urgent consideration' to address these costs, suggesting delaying investments not needed in the short term.
Chris Norbury, chief executive of E.On UK, supported this view, stating that even if wholesale prices were zero, bills would remain at current levels due to non-commodity cost increases. The typical household energy bill under the price cap has already risen to £1,755 a year this winter, over £500 higher than before Russia's invasion of Ukraine.
A government spokesperson rejected the speculation, blaming high wholesale gas costs, which remain 75% higher than pre-invasion levels. They argued that the only way to reduce bills is by making Britain a clean energy superpower, breaking reliance on fossil fuels.
Energy Secretary Ed Miliband has previously blamed the global gas market for rising bills and claimed that reducing reliance on gas could cut bills by up to £300 a year by 2030. However, Fletcher and Norbury cautioned that removing gas plants alone would not solve the crisis unless fundamental drivers of energy bills are addressed.
