A recent House of Commons Committee of Public Accounts’ report highlights a significant increase in UK household energy costs, with gas and electricity bills rising from $1,583.88 in 2021-22 to over $4,960 by 2023. They write:
Prices for electricity, gas and other fuels in the UK and Europe increased significantly from summer 2021, initially as economies reopened after COVID–19 and later when Russia’s invasion of Ukraine impacted global energy markets. Average annual household bills for gas and electricity increased from £1,277 in winter 2021–22 to over £4,000 by the start of 2023.
In response, the government implemented eight support schemes from 2022 to 2024 to reduce the impact of increased energy bills on homes and businesses. These schemes worked by either providing grants or by capping the wholesale energy prices suppliers could charge customers.
The Department for Business, Energy & Industrial Strategy (BEIS) had overall responsibility but in February 2023, following machinery of government changes, this passed to the newly created Department for Energy Security and Net Zero (the Department). The energy regulator for Great Britain, Ofgem, was responsible for monitoring supplier compliance with the obligations of the schemes, such as ensuring that bills were reduced to specified levels.
The Department estimates the schemes cost £44 billion. It is set to complete an evaluation of the impact of its schemes by Summer 2025 and is developing its approach to protecting consumers against future volatility in energy prices, such as considering how it could provide more targeted support for those consumers that need it most. The previous Public
Accounts Committee reported on the schemes in June 2023. […]The United Kingdom has the highest price (including taxes and levies) for domestic electricity out of 25 International Energy Agency (IEA) countries reporting in 2023. Similarly, the UK has the highest price (including taxes and levies) for industrial electricity out of 24 IEA countries, again reporting in 2023. The price of the UK’s electricity is almost four times that of its gas.
This is partly because the government’s levy for environmental policy costs (such as schemes to support renewable energy development) accounts for over 10% of an electricity bill. […]We asked the Department why it was taking so long to get small modular nuclear reactors “up and going”. We also asked how it was going to make sure that a high percentage of the content of a modular nuclear reactor was from the UK (which was not the case with offshore wind farms). The Department told us that there was nowhere in the world with an operating small modular nuclear reactor, and that it needed to make sure the procurement exercise for this technology was run appropriately.
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