HOUSEHOLDS are facing further hikes to gas and electricity bills as winter approaches.
The National Grid, which manages energy supplies to UK homes, says gas and electricity stocks won’t run out but the gaps between supply and demand are narrower – which could mean higher bills.
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Rising wholesale gas prices and increasing demand after the easing of lockdown restrictions have put energy companies under pressure.
Nine energy companies including People’s Energy and Utility Point went bust alone last month amid rising costs, and others are believed to be under pressure.
The collapses come as industry regulator Ofgem hiked the energy price cap for default bills this month by £139 to £1,277.
A combination of failing suppliers, rising wholesale costs and the energy price cap change also means households are facing higher bills.
Citizens Advice has warned that customers of failed suppliers who have been moved to new deals could end up paying up to £2,000 more per year.
Many comparison websites are also telling customers to avoid switching for now due to a lack of competitive deals.
But industry experts at the National Grid don’t expect things to get much better any time soon as the cold winter approaches.
The National Grid has released outlooks on the gas and electricity market that say storage capacity and supplies are safe.
But it warns that, as in previous winters, a “positive market price differential” will be required for British suppliers to compete with other markets to purchase gas.
This means energy companies will have to pay more to buy gas supplies and these costs may then be passed on to customers.
The National Grid is also expecting the margin between electricity supply and demand to be lower this year at 6.6% compared with 8.3% in the winter of 2020.
That means the National Grid expects to have 6.6% of supply left at peak times and it warns that these “tighter margins mean energy prices increase to reflect the scarcity of the resource.”
A number of energy firms have announced that they will not be accepting new customers amid concerns around rocketing gas prices.
Here is what to expect if your energy supplier fails.
Citizens Advice has a handy list of the new suppliers which have taken over the ones which have gone bust.
More energy firms set to fold with millions of families facing higher gas and electric bills
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