UK's energy bills to soar by 60 % by 2016

Oct 09, 2009 02:00 AM

Domestic UK energy bills could rise by 60 % by 2016 in a worst-case scenario identified by the energy regulator (Ofgem). However, most other estimates outlined in an official report would see prices rise between 14 and 25 % above inflation by 2020.
The review also said that up to £ 200 bn of investment was needed to secure supplies and to meet carbon targets. Volatile gas markets and power stations nearing the end of their use were the chief concerns, the regulator said.

The report was the result of Project Discovery, a scheme that Ofgem started in March in which it outlines four possible scenarios for energy use and security in the next 10 to 15 years. It pointed out the need for investment came at a time of volatile world energy prices and Britain's increasing dependence on gas imports.
This exposure meant that supply disruptions across the world could affect prices.

The scenario in which prices could spike by 60 % was that of a strong resurgence in global economies, along with missed renewable and carbon targets, and no nuclear facility built before 2020.
The report said the cheapest scenario -- with a hike in bills of 14 % by 2020 -- factored in a slow recovery from the recession, coupled with global green stimulus packages.

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