National Grid Say Electricity Prices Could Double Over Next 20 Years
We often scrutinise energy prices here at the Love Energy Savings News Centre, with value for money being at the heart of what we do. Whether it is energy suppliers not passing on their savings to you despite record profits or value for money simply not being provided, we are quick to report on these issues. You can imagine our dismay then, when we found out that electricity prices could as much as double over the next couple of decades.
Operators of many of the UK’s electric pylons and gas pipes have made the prediction due to a lack of investment in local production, which will see us 90% dependent on importing our gas and electricity. This will have the obvious effect on pricing and see already inflated prices soar further yet.
Power Station Closures...
The National Grid has stated that future increases in the price of electricity will most likely be attributed to the amount of coal fired power stations being closed across the country. In addition to this, the subsidising of wind farms is said to be a heavy burden on the energy industry.
At present, the price of wholesale electricity is under £50 per megawatt hour but this could far exceed £100 over the next twenty years, this is based on a high case example from the UK Future Energy Scenarios report put out by the Grid this month. Gas prices could suffer the same fate, rising from 70p per therm to over £1 for the same quota.
Electricity prices in the UK have already increased by 20% over the last five years, much to the chagrin of home and business energy customers alike. Much of this will be blamed on anti-pollution directives such as the Large Combustion Plants Directive, although many will be likely to point the finger at energy suppliers looking to give their profits a boost.
Stoking The Fracking Flames...
The situation is likely to add further fuel to the ongoing fracking debate, as the UK looks to emulate the success that has been enjoyed across the Atlantic. Gas and oil production in the North Sea has been extremely poor of late due to many fields running dry and the implementation of shale gas drilling could help to boost the deficit.
Government support is now gathering momentum for fracking to get off the ground in the UK, especially as the National Grid has announced that approximately 40% of Britain’s gas needs could be catered for via shale gas extraction. Failure to invest in such methods will not help to make up the shortfall and would almost certainly contribute significantly to the 90% of energy that we would be required to import in a couple of decades time.
The Grid has been reluctant to get involved with the Fracking saga over the years, but with more and more information becoming available and an ever more compelling case being put forward, the time appears to have arrived for the Grid to lend their opinion.
In an added dimension to the issue, the forthcoming prices rises could help the government to implement plans to contribute a £89.50 per megawatt subsidy to EDF Energy. This would be for the energy supplier to produce electricity from their proposed new nuclear facility to be situated at Hinkley Point in Somerset, this could be completed by 2023 which could help to counteract the energy price rises being suggested by the Grid.
The Love Energy Savings team will be following this issue closely as it develops. If you want to keep up to date with the latest goings on from the energy industry, be sure to follow @LoveEnergySavings on Twitter.