The numbers don’t lie—gas is the main reason energy bills have skyrocketed over the last four years.
That’s the view from the Energy and Climate Intelligence Unit (ECIU), who have worked out that gas price spikes will have added a staggering £3,000 to the average UK household bill since the crisis began.
That’s £750 a year, seven times the cost of supporting renewables.
“Let’s be very clear on this, it is gas that has been driving up energy bills over the past four years and it continues to do just that,” said Jess Ralston, energy analyst at the ECIU. “Families are struggling because the UK is heavily reliant on gas for both electricity generation and home heating and the price of gas is volatile.”
Wholesale energy costs have surged, with gas responsible for £1,800 of the £3,000 increase.
Although renewables make up a growing share of electricity generation, gas power plants still set the price for the entire market. That means when gas prices spike, so do electricity bills.
The volatility isn’t going away anytime soon. Gas prices recently hit a two-year high, and while the energy price cap may dip later this year, it’s expected to rise again.
The Energy Crisis Commission has already warned that the UK remains “dangerously underprepared” for another gas crisis, given its heavy reliance on gas for power and home heating.
There is a way out. Fixed-price wind farms under Contracts for Difference agreements are already subsidising bills when wholesale prices rise and the costs of older schemes are set to fall.
Insulating homes, expanding renewables and accelerating the switch to heat pumps could stabilise prices and shield households from future shocks.
“The world is an unpredictable place and energy security is national security so switching to homegrown electricity leaves us less vulnerable to the whims of actors like Putin,” Ralston added.
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