Tackling energy prices

Last week, npower became the fifth member of the 'Big Six' to announce energy price rises, with just EDF Energy yet to release changes to its prices.

Indeed, our news headlines seem to have been dominated by price rises from all directions, from the cost of the weekly shop, clothing, rail fares, petrol, gas and electricity, prices are unfortunately going up and are unlikely to fall anytime soon.
Admittedly at 12.2% npower's dual fuel increase is the lowest so far, but this still remains well above the current rate of inflation which stands at 4.4%. An increase of 12.2% equates to an increase of 37p per day, or around £134 per year €š¬" a sizable amount for many people.
In a week where we hear that rail fares are set to rise by as much as 8%, it means that many British consumers will certainly be feeling the extra pinch come winter and will be hoping we avoid another 'Big Freeze'.

According to npower, the new rates are on average £30 per year cheaper than its rival British Gas, which has increased its prices by 34%.By comparison, Scottish Power and SSE have announced they will raise prices by 29%, and Eon by 29.5%.
But what is to blame for the escalating cost?

The increase in our energy prices is the result of a combination of factors. In 2011 alone we have seen oil, coal and gas prices hit record highs - largely because of unrest in the global energy markets.
Tragic events such as the Japanese earthquake and tsunami, and political conflict in Libya have certainly played a part in increasing our energy bills, as oil prices this year have risen by as much as 32%.

It has also been predicted that by 2015 the UK will import as much as 75% of its gas, which will force UK energy suppliers to compete with the overseas market, leaving Britain somewhat at the mercy of international events.

So what is the answer? Can we save money by limiting our energy use and should we investing more in our energy infrastructure?

Unfortunately, learning to curb our energy use is easier said that done - despite good intentions, as society has become more, not less energy dependent. Most of us would struggle to go just one day without plugging into the national grid for some task or other.

When it comes to energy infrastructure investment in the UK, there are a number of targets in place, many of these forms of green energy. However, with a bill of at least £5bn needed to support infrastructure improvements it is likely we will all be feeling the burden of the task in hand for sometime.

As an EDF customer I can't help but feel slightly apprehensive about how much it plans to increase its energy rates by. Although its website claims that it doesn't plan to raise rates until 2014, when it does how much it will be by remains to be seen.

One thing is for sure, as countries across the globe all fight to source enough energy to fuel increasing populations is that prices will continue to rise.  


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Carys Matthews

Topics: edie
Tags: | coal | energy bills | gas | Infrastructure | rail
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