Yahoo Finance UK households warned energy bills may spike this winter
A drop in temperatures and fast recovery in the Chinese economy could drive up gas prices
UK households must prepare for another surge in energy bills this winter, the head of the International Energy Agency (IEA) has said.
Fatih Birol told the BBC’s Today programme that if China’s economic recovery from the pandemic accelerated later this year and the winter in the northern hemisphere was harsher than last year’s, prices would rise.
"In a scenario where the Chinese economy is very strong, buys a lot of energy from the markets, and we have a harsh winter, we may see strong upward pressure under natural gas prices, which in turn will put an extra burden on consumers," he said.
"We cannot rule out" another spike in gas prices, he added.
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The IEA boss also said that governments should push for energy-saving measures and boost renewables to avoid having to intervene to subsidise bills again.
Energy bills are beginning to fall back as the mercury rises following a sharp jump following Russia’s invasion of Ukraine.
Despite the drop, the latest figures from energy regulator show that the number of customers disconnecting from the grid have surged — along with levels of energy debt.
In the first three months of the year, consumers disconnected from their energy supply more than 5 million times. Almost 1.2 million customers were affected with over 800,000 bill-payers disconnecting for more than three hours.
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Birol also said he could not rule out blackouts in the winter, which could be “part of the game”.
National Grid said last winter that short power cuts were a possibility — in the end, this was not necessary.
For now, about 27 million homes in England, Scotland and Wales can expect a modest drop in energy costs over the summer after the regulator Ofgem lowered the cap on a typical annual dual-fuel tariff to £2,074 a year — down from the £2,500 a year level set by the government’s energy price guarantee.
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