£12bn energy investment is “a drop in the ocean”

Britain's households could have to find an extra £1.3bn because of controversial claims for cash by gas companies that will increase domestic energy bills, says uSwitch.

At issue is a £12bn demand from National Grid, which runs half the country's gas-main networks, and the three other companies that operate the rest, to maintain, upgrade or replace the nation's gas supply over the next five years.

UK households will be expected to fork out £1.3bn of that. Britain's homes already pay an average of a fifth of their gas bill, or about £100 a year, for the upkeep of the mains.

That could rise by up to £50 over the next five years, according to consumer group energywatch.

Commenting on this news, Ann Robinson, Consumer Policy Director at uSwitch.com, the independent online comparison and switching service, says: “It’s right that consumers should be warned of this as it’s becoming apparent that household energy bills will steadily rise over the next few years. But consumers should also be told that £12 billion is just a drop in the ocean compared with the total amount that needs to be invested. This initial investment is purely to cover work needed for public safety – and it will be the first of many energy-related tabs that consumers can expect to be picking up.

“This investment is a necessary evil. The timing is awful coming hot on the heels of another base rate rise – many householders will be throwing their hands up in despair - but there will be worst to come. Consumers can also expect to be forking out for maintenance of pipes and wires, new power stations, replacement of generation capacity and ongoing maintenance. And then there is also the national grid to consider.

“Consumers will be feeling pretty hard done by – they are still waiting for around £200 in price cuts each household from suppliers following wholesale price reductions and before even getting wind of this they are being warned of yet more price rises around the corner. Over the coming years it will become even more important for people to shop around for the best energy deal for them as a way of trying to keep a lid on household expenses.”