According to a new report by Cornwall Insight, energy bills throughout the UK could reportedly rise as much as 30% next year if electricity and gas prices continue to skyrocket and more energy suppliers go bankrupt.
According to reports, the energy price cap, which has established a high record of £1,277 about a year from October 1st, will have to be considerably increased in spring 2022 as the energy crisis persists.
it is anticipated that Ofgem will raise the energy price ceiling by around 30%, to around £1,660. The industry regulator has stated that if gas prices continue to climb or remain at such high levels, the price ceiling will have to be raised when it is reassessed on April 1st.
Craig Lowrey, a senior consultant at Cornwall Insight stated that with wholesale electricity and gas rates continuing to set new records, multiple supplier departures in September, and a new threshold for the default tariff limit, the UK energy industry is poised for additional volatility and consolidation.
In recent weeks, nine suppliers have gone out of business due to their inability to keep pricing commitments in the face of increasing wholesale gas costs. More are expected to follow.
In a separate caution note, the founder of renewable energy supplier Ecotricity stated it does not make much sense to set a retail price limit in place while not setting one for the wholesale price, accusing the UK government of destroying energy firms right now.
Dale Vince, at the Today program hosted on BBC Radio 4, stated that it is irrational to keep rates at one end of the distribution network but not the other, and the inevitable result is that firms go out of business.
Vince added, the government has presently shut its eyes and ears to this issue, essentially stating that they do not care and would not assist energy firms, but this misses the point because they are already tearing down energy companies.
Nationalization of the industry, according to Vince, should be explored.