Energy bills could go up by 30% next year if chaos continues

By Catherine Furze

This year's rising heating bills could be the tip of the iceberg, according to analysts.

The predicted collapse of even more power suppliers and continued volatility in prices could push the energy price cap to about £1,660 in summer, research agency Cornwall Insight has warned.

The bleak forecast is about 30% higher than the record £1,277 price cap set for winter 2021-22, which came into force this month.

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The cap was introduced in 2019 and limits the amount energy companies can charge customers on standard variable tariffs.

But the limit is based on the maximum a supplier can charge if you are an ‘average user’, so if you use more, you pay more..

Energy regulator Ofgem reviews the price cap once every six months, and changes it based on the cost that suppliers have to pay for their energy, cost of policies and operating costs, among other things.

In a statement to the BBC, Ofgem acknowledged it was a “worrying time for many people”.

The regulator added: “The energy price cap covers around 15 million households and will ensure that consumers don’t pay more than is absolutely necessary this winter.

“However if global gas prices remain high, then when we update the price cap unfortunately the level would increase."

In a report on Walesonline, Craig Lowrey, senior consultant at Cornwell Insight, said: “With wholesale gas and electricity prices continuing to reach new records, successive supplier exits during September 2021 and a new level for the default tariff cap for Winter 2021-22, the GB energy market remains on edge for fresh volatility and further consolidation."

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