Ofgem review of energy market predicts future prices are going only one way.
The report, named ‘Project Discovery’, reviews a series of possible energy climate scenarios that the world could experience, and all four of the scenarios see a rise in price over the 10 years.
The report claims that £200bn of investment is needed in the UK’s energy market in the next 10 years, for securing supplies, and in order to hit carbon targets.
This means customers could face potential price rises to fund this investment, the report says.
The worst case scenario, a “dash for energy”, sees domestic energy bills hit a peak of £2000 per year in 2016 before dropping to around £1500 per year by 2020.
This scenario describes a fast recovery from recession, but securing energy supplies takes priority over meeting carbon targets, resulting in a global dash to obtain as much fuel as possible and hence pushing prices of fuel upwards.
The other scenarios are ‘Slow Growth’, ‘Green Stimulus’, and ‘Green Transition’. The best case scenario, Green Stimulus, Outlines governments implementing green initiatives such as nuclear plans and carbon storage in a slow recovery from recession. this sees a %14 rise in domestic bills by 2020.