Energy Bill Hike: Millions of UK Households Bracing for £200 Increase

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By Lydia Amazouz Last modified on March 12, 2024 23:56
Energy Bill

UK households face paying an additional £200 on their energy bills as plans to maintain Britain's lights through the construction of extra gas-powered fire plants will soon take effect.

Experts Warn: Rishi Sunak's Policy Could Increase Household Energy Bills

According to experts, Rishi Sunak's policy announced on Tuesday would translate to a consumer bill reaching £5 billion, which equals around £178 per household over the course of a decade or longer.

Tom Smout, of Aurora Energy Research, responsible for conducting the findings, stated: “What consumers are being asked to buy is energy security.

“The priority is to keep the lights on by having backup for the intermittency of renewables.

See also
Will the UK Face Electricity Blackouts as it Transitions to Renewables?

“An extra 5Gw of new backup generating capacity is needed to keep the lights on. Each gigawatt of capacity will cost about £1bn.”

Official government documents, made public on Tuesday, included that plans to enhance Britain's energy security require building additional gas-fired power stations, which will be financed by bigger funds to install operators, leading to higher energy bills for houses and companies.

Capacity markets, an auction mechanism that compensates operators for being on a 24-hour standby to supply power when sources are scarce, will be used to pay electricity generators.

Electricity Demand Surges as Output Trails

The generators will only be put to work when green energy sources like wind and solar fail to provide, which usually occurs when the weather conditions are unpleasant.

See also
Will the UK Face Electricity Blackouts as it Transitions to Renewables?

Tuesday's official estimates highlighted that gas plants will only be put to use for around 29 days in 2030, which equals 700 hours.

The projected data for the next decade is below 50% of that, which will drop to fewer than 100 hours by 2040.

It comes after ministers issued a severe warning, stating that Britain runs the risk of not having enough electricity generation for the next 20 years.

Because net-zero standards are driving a transition to green energy sources like offshore solar and wind energy, Britain's capacity to produce electricity has grown more and more dependent on the weather.

Nevertheless, periods of weak winds and less sunlight pose a threat to energy sources because they drastically reduce renewable energy production.

See also
Will the UK Face Electricity Blackouts as it Transitions to Renewables?

During the announcement of new gas-fired power plants on Tuesday, Claire Countinho, the Energy Secretary, declared: “A weather-dependent, renewables-based electricity grid means we will need to have flexible power for when the wind doesn’t blow, and the sun doesn’t shine.

“Without gas backing up renewables, we face the genuine prospect of blackouts.”

Challenges Ahead: Britain's Energy Policy Faces Uncertainty

Britain counts about 32 gas-fired power stations with the ability to generate around 27 gigawatts (Gw), which is sufficient to supply about 20 million houses with power.

However, due to a lack of clarity surrounding energy policy over the previous 20 years, not many new ones have been constructed, leaving Britain with an extensive number of outdated gas plants.

See also
Will the UK Face Electricity Blackouts as it Transitions to Renewables?

Within the next few years, more than half of them will close, reducing their producing capacity by 15Gw and leaving the National Grid with access to just 12Gw of currently operating plants.

It is already anticipated that another 9Gw of additional capacity will bring the total to 21Gw.

However, the government projects that 22 to 28Gw of gas-fired plants will be required in 2035 just to keep the lights on.

The majority of the revenue for the new power plants would come from capacity payments, which are funds provided by the government to construct and maintain power plants.

But if they're turned on, they would be paid more for the electricity they produced.

See also
Will the UK Face Electricity Blackouts as it Transitions to Renewables?

Deputy Director Kisha Couchman of Energy UK, a supplier advocacy organization, stated: “The pathway to net-zero set out by the Climate Change Committee does include a small role for unabated gas to ensure security of supply, but the Government must also ensure that there is a clear decarbonisation pathway for these plants, either through carbon capture and storage or hydrogen.”

Yet Baroness Brown, the Climate Change Committee's vice-chairman, stated: “It is disappointing that the Government seems to be focused on fossil fuels as a stop gap and not long duration energy storage as a secure solution.”

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