The UK's energy policy is under fire as the price cap rises by 4% on October 1, taking a typical household bill to £1,723 a year, according to Ofgem. The increase adds another £60 to annual costs just before winter, with energy consultancy Cornwall Insight forecasting a further 9% rise in January. Andy Burnham's removal of VAT on electricity provides only about £45 a year in savings against the £60 increase.
Renewables Subsidies Cost Households Billions
Government figures show the Renewables Obligation, introduced in 2002, has cost more than £101bn at today's prices. Adding contracts for difference, feed-in tariffs, and the capacity market, one recent estimate puts the total cost of subsidising renewable electricity since 2002 at nearly £220bn, or some £8,000 per household.
The average dual fuel household paid £1,289 in 2015, but from October this year they will pay £1,723. Labour promised to knock £300 off bills but has instead presided over a rise approaching £400. Household energy debt has reached £6bn and is expected to touch £7bn by Christmas.
Grid Balancing Costs Soar
Shadow Energy Secretary Claire Coutinho compared the pricing of renewables to Ryanair, noting it's cheap until you factor in everything you actually need. The extras are significant: £1.5bn was spent last year paying wind farms to stop generating electricity because turbines built in Scotland cannot send power south through existing cables. Gas plants in England were then paid to make up the shortfall, with this year's bill passing £1bn by the first week of August. The system operator reckons balancing the grid could cost £8bn a year by 2030.
North Sea Fields Await Decision
Norway's energy minister has confirmed drilling in the Barents Sea will continue regardless of any Brussels moratorium, and their trade unions are lobbying ministers to open up more of it. Adura, the venture Equinor runs with Shell, is waiting on Andy Burnham and his new energy secretary to decide the fate of two North Sea fields, Jackdaw and Rosebank. Jackdaw alone could heat 1.4 million homes through existing pipes. If refused, the UK will end up buying the same gas from Norway or shipping it in from the Gulf with a worse carbon footprint.
British industry faces some of the highest electricity prices in the developed world, leading to factory jobs vanishing and reappearing in countries with cheaper coal. Every closure counts as an emissions reduction on UK books, but the country has simply arranged for someone else to make steel and chemicals, often badly, and sell them back. When Claire Coutinho commissioned a proper costing of the energy system in 2023, Ed Miliband cancelled it the moment his party won power. After 24 years of renewables spending, nobody in charge has been willing to add it all up, and that rather than any single price rise is the real scandal.
