Gas and Electricity Suppliers Predict Energy Price Rises

RWE npower, one of the main gas and electricity suppliers in the UK, recently predicted a rise in energy bills of up to 20 percent by the year 2020. This is concerning most energy suppliers, as consumers tend to think that the majority of profits from their energy bills are going into the company’s pockets. In fact, companies typically control about 16 percent of your energy bill, so they don’t have a lot of say in how high your bills rise.

The main reason RWE claims energy bills will be increasing to an average of 1,487 per year by 2020 is because of government subsidies and taxes that promote clean energy and renewable power. Obviously, RWE has a stake in the matter, but even when gas is phased out as an energy source, our current electricity suppliers will likely own the main power stations that produce whatever types of renewable energy power the grid at that time. Any company in this position would want to look to the future, and it’s smart that you take the same steps as a consumer.

“Why” Is Not The Most Important Question

Gas companies, politicians, government agencies, and environmental groups almost universally agree that the price of a power bill is going to be increasing over the next five to ten years. Clearly, that is not the issue at stake for each of these groups and their own interest in the price rises they’re interested in promoting the solutions they feel best to our energy dilemma. Yet for the consumer, the ultimate goal is likely the lowest possible power bill, so for you, the reasons for the increase are much less important than ways to counter it and bring down your bill.

Can Prices Decrease In The Long Term?

The goal of many clean energy initiatives is to help prices decrease, or at least remain stable, over the long term relative to the price of gas. Since worldwide gas prices are rising, a fact that nobody can dispute and the government attributes the forecasted price rises to, power bills would be very expensive if we continued to rely on the current power mix. As such, it’s almost inevitable that price rises in the short term would be necessary to pay for the switch to clean energy, but hopefully, they will decrease again in the long run as energy costs less to generate and can be found for free through solar and wind power, for instance.

Keeping Your Power Bills Down Will Help

To help pay for your power bill in the short term, keeping your consumption of power down is a good strategy. There are lots of energy-saving strategies you can use to decrease your reliance upon the energy grid, including everything from switching lightbulbs to repainting your roof. You can take advantage of Green Deal assessments that provide customised suggestions based on your household. Some programmes exist to help you pay for an energy-efficient boiler, give you discounts on your heating bills if you are at risk of fuel poverty, and so on.

Individual Sustainable Energy Might Be The Way Of The Future

Are Social Energy Tariffs As Fair As People Think

When social tariffs were first proposed, they were not seen as being fair to everyone. The idea was to combat excess winter deaths by helping UK residents that were at risk of fuel poverty to pay their bills with a discounted rate. However, that discount would be heaped on the backs of wealthier customers who would then make up the difference. The effect was to be temporary as the Green Deal would then help more and more UK residents to adopt green technologies that would reduce the overall energy demands of the country via grants and other types of financial assistance. Now that the social energy tariffs are being replaced by the Warm Home Discount, the same question arises with respect to the most vulnerable groups in the UK. Is it fair to get rid of social tariffs that the broader group needs to keep heating their homes?

Low Income Group Has Green Options

The UKs energy strategy continues to evolve as it seeks to reduce its dependence on outside energy sources while maintaining social protections in place for its more vulnerable citizens. The social tariffs were never meant to be a permanent fixture, as the policy outline in 2009 indicated that the effect would be temporary based on the implementation of the Green Deal technologies. For that reason, numerous schemes were put in place to help low-income citizens improve the draughty homes so typical of Britain using insulation, window-glazing, and other services. Many of these services were provided for free to qualifying low-income households. Also, those who could afford to implement these technologies and pay for them were also helped to find ways to achieve these goals. None of these energy schemes are expected to last forever, however, and even the Warm Home Discount is to expire in March 2015.

Keep An Eye On Excess Winter Deaths

There is data to indicate that the social energy tariffs, along with other grants and energy improvement schemes, have helped to reduce the excess winter death rate in the UK. While there were 24,000 excess winter deaths for the winter of 2011/2012 in England and Wales, that figure represents an 8 per cent drop from the previous winter. The social tariffs are being slowly phased out, with many of them being replaced by the Warm Home Discount for the 2013/2014 winter seasons. Even though no one can tell how much warmer home are in the UK, if the schemes have done their job and the Warm Home Discount is doing a fair job of it, then this number should continue to decrease. If it goes up, it will be a huge indicator that more changes need to be made to the UK energy strategy, not just to make it fair, to avoid killing more residents.

Fair Deals Change With Government

A question of fairness is always going to be an issue with social reforms. However, political parties tend to see fairness in their own terms. This does lead to changes in how schemes are planned and implemented, or whether they are eliminated altogether. Some would suggest that the Winter Fuel Payment changes are unfair to expatriates who live in countries deemed “warmer than the UK” even though the winters may be equally harsh. These UK residents will no longer be eligible and may suffer undue hardship. However, with the change of government, comes a change in the ideals of fairness. The new government believes that it is not fair to continue to pay for heat subsidies that are going to people who arent even in as drastic a need of them as others. As policies change, so do social tariffs, with the eye towards creating reforms that hit realistic targets and that do good in the community of people it is meant to serve. None are meant to be permanent, nor are they meant to require no further changes once they are implemented. As the UK faces the harsh winter ahead, social tariffs may be a thing of the past, but the ideal to create a fair society where even the most vulnerable have a chance at being able to pay their bills has not. It is merely changing and adapting towards newer social reforms that meet the needs of the population as a whole.