Analysis has calculated just how much more households have had to shell out for energy over recent years because of a series of global energy shocks that have sent wholesale costs soaring
Households are on average £3,400 worse off because of a series of energy shocks over the past five years, research has found.
Bills have jumped because of a number of unexpected events which has sent wholesale energy costs soaring, and ordinary customers paying the price.
Global prices for gas and electricity started to increase from the summer of 2021, when economies began opening up after pandemic related-lockdowns.
The rise was then intensfied by reduced supply of fuels from some producers and increased tensions between Russia and Ukraine, and then the all-out world.
The latest chapter in the energy crisis has come with the Middle East conflict, with predictions that higher oil prices will feed through to households energy bills from the end of summer onwards.
Analysis from the Energy and Climate Intelligence Unit found gas and electricity bills for a typical household are £4,800 more over the five years since 2021 then they were in the five years beforehand. The figure takes in estimates for increases in Ofgem’s price cap for tens of millions of customers this autumn.
Government support schemes in 2022 and 2023 – funded by taxation – paid around £1,400 of the extra costs, leaving a typical household paying an extra £3,400 directly on bills.
Jess Ralston, energy analyst at the Energy and Climate Intelligence Unit (ECIU), said: “Households are being hit by back‑to‑back gas crises caused by wars thousands of miles away.
“Many families are still carrying debt from the last spike and have little resilience left to absorb further increases, with higher bills expected from July.
“The UK has made major progress in reaching for net zero emissions, getting off oil and gas and rolling out renewables which are now already lowering wholesale electricity prices, helping to stabilise bills by replacing gas power stations.
“They also strengthen the UK’s energy security by cutting the amount of gas the UK has to import, particularly as the North Sea continues its ongoing decline.”
Wholesale gas costs and VAT account for around three-quarters of the extra costs for a typical household over the past five years, the analysis found.
