Households Face Higher Costs as Gas Storage Levels Drop Across Europe

Millions of households in Great Britain are expected to see an increase of £85 in their annual energy bills from April due to declining gas storage levels across Europe, analysts have warned.

Under the latest forecast, average gas and electricity costs for households in England, Scotland, and Wales are projected to rise by nearly 5% to £1,823 per year under Ofgem’s price cap. This prediction from Cornwall Insight is higher than the previous estimate of £1,785, following colder weather and reduced renewable energy output impacting gas reserves.

Ofgem, the energy regulator for Great Britain, is set to confirm the new price cap on 25 February for the period beginning 1 April. In January, the cap was raised by 1.2% to an equivalent of £1,738 per year.

The anticipated increase marks the third consecutive quarterly rise in household energy costs, posing a challenge to the government’s pledge to reduce energy bills by “up to £300 by 2030”. Households using more than the average amount of energy could face even higher costs, as the price cap limits the rate charged per energy unit rather than the total bill.

Approximately 9 million households on variable tariffs linked to the price cap will experience an immediate impact from April, while those on fixed tariffs will see changes later.

In response to the forecast, Energy Secretary Ed Miliband urged Ofgem to take quicker action to protect consumers from the volatility of global gas markets. He called on Ofgem’s chief executive, Jonathan Brearley, to implement faster measures, which may include accelerating the transition to renewable energy sources.

Doug Parr, policy director at Greenpeace UK, emphasised the need for long-term solutions, stating: “Urgent support is required now, but sustainable solutions like renewable heat pumps and better home insulation are essential for achieving cheaper energy and stabilising prices.”