Europe

Liz Truss U-turn risks leaving Britons at mercy of energy price cap

Energy: Radio caller says he’s ‘waiting to be cut off’

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Liz Truss’ energy bills U-turn could leave cash-strapped British families paying nearly double the amount outlined in the energy price guarantee. Government plans announced by Chancellor Kwasi Kwarteng outlined two years of support aimed to cap bills at £2,500 a year. But Jeremy Hunt has chosen to limit the scope of that action, shortening its duration to just six months.

Mr Hunt has only guaranteed that support until April next year, and how the Government directs aid in the months following is undecided.

Experts believe the Chancellor intends to target the guarantee for the UK’s poorest families.

Everyone else will have to navigate British energy regulator Ofgem’s price cap, which was on the verge of raising bills by 80 percent to £3,549.

Financial firms expect the cap will rise beyond even this in April 2023, possibly beyond double the guaranteed rate.

Independent energy consultancy Auxilione has predicted the price cap could reach £5,078 next year.

Auxilione’s forecast is at the top of the scale, with other firms estimating lower but still crippling bills.

Cornwall Insight, which has tracked the price cap all year, provided a more conservative estimate of £4,347.69.

The firm expects gas will form most of that total cost by next spring.

Per Cornwall Insight’s analysis, gas supplies could set people back up to £2,286.70 a year, while electricity costs £2,060.99.

After spring, the consultancy predicted the price cap would ease slightly.

By July, forecasts expect the cap will fall to £3,697 before rising slightly to £3,722 from October.

Before Britons pay a premium for their energy next spring, a potentially troublesome winter looms.

National Grid has warned that increased energy demands may require forced blackouts over the next few months.

Officials have said that “really cold” evenings could leave the UK with dwindling supplies.

In this case, the chief executive John Pettigrew said that “really, really cold” evenings may require blackouts between 4pm and 7pm.

Mr Pettigrew delivered the warning during the Financial Times’s Energy Transition Summit, where he said rolling power cuts would take pressure off gas supplies.

But the executive stressed blackouts are among the “unlikely” plans National Grid may have to make.

The utility firm maintains that British supplies can hold up during a cold winter.

Mr Pettigrew outlined the “base case” was that gas and power can meet demand but added that the global situation remains fragile.

He said: “In the context of the terrible things that are going on in Ukraine and the consequences of that [it was] right that we set out what some of the potential risks could be.”

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