A Perfect 10:

Domestic energy prices set to soar by 10% says expert…

With the country descending into a cold snap any price rises in energy will be felt keenly by those with stretched finances as well as the elderly.

Domestic energy tariffs saw several rapid increases during 2006 with some suppliers even putting prices up three times during that period.

Since that peek domestic energy tariffs have been coming down this year. The prices have fallen as new projects to import gas have eased concerns about a supply gap caused by sliding output from the ageing North Sea fields. At the start of the year, following a mild winter and increased imports from overseas, we saw a sustained fall in wholesale prices by as much as 50% since the summer of 2006.

It was widely expected that with factors including additional gas supplies and a milder winter forecast for 2007, these should have worked to provide downward pressure on wholesale prices this year and it was anticipated that we would see further falls of about 20%.

The price that we pay for electricity is largely dictated by wholesale electricity prices. As approximately 40% of UK electricity generation comes from gas-fuelled power stations then wholesale electricity prices are in turn obviously affected directly by the wholesale price of gas.

During 2007, wholesale gas prices began to rise at an unprecedented rate. As the world economy has grown, demand has pushed wholesale gas prices through the roof. The UK’s North Sea fields have declined faster than predicted, so the UK has been forced to import more gas from Europe. The price of gas imported from the continent is linked to the price of oil, which peaked again this month. However the market for crude oil gas has been very volatile and the price could easily rise further.

Another main factor on the current supply is the forthcoming winter weather which will affect demand. The Met office is suggesting that this coming winter may be colder than usual.

The combination of these risks may become more serious as supply and demand plays a major factor in the market prices and any sustained cold weather will have an immediate impact on the price.

Chris Hurcombe, Operations Director, of Catalyst Commercial Services, warned yesterday that domestic prices may still go up. He said: “Prices of domestic electricity and gas look likely to go up again, a 10% hike in prices would add over a £100 to the typical gas and electricity bill. “The first to increase prices will probably be the catalyst for others to follow”

Hurcombe concluded “However recent reports suggest that 9.3 million households have still not taken advantage of competition by switching to a cheaper provider”.
_____________________________________________________

For interviews, quotes, photos or comments contact:

Mr. Christopher Hurcombe
Operations Director
Phone: 0870 710 7560
Email: info@catalyst-commercial.co.uk

Notes for Editor:

Catalyst Commercial Services Ltd

Catalyst Commercial Services (www.catalyst-commercial.co.uk) provides an independent energy procurement service for medium to enterprise businesses in the UK. We also provide energy management services and advice on smart metering technology.

1. [...] read more | digg story [...]

   Pingback by Domestic energy prices set to soar by 10% says expert « Haunting Thunder — November 27, 2007 @ 10:07 am

RSS feed for comments on this post. TrackBack URI

You must be logged in to post a comment.