Household bills could hit almost £2,000 in 7 years time

uSwitch.com welcomes Ofgem's report as it provides clarity about the issues facing Britain and the security of its energy supplies.

However, the report may be in danger of understating the amount that energy bills could rise as a result of the much needed investment. This is because it only takes into account the £233.5 billion investment needed and is ignoring wholesale and other costs.

The Ofgem report offers four scenarios on the average household energy bill, which is currently £1,239.

Ofgem's worst case scenario is an annual bill of £1,982 in 2016. However, uSwitch.com research earlier this year predicted that bills could reach as high as £4,733 a year by 2020, nearly four times higher than they are today. This figure takes into account ongoing pricing trends coupled with investment in infrastructure, the cost of cutting carbon and boosting energy efficiency:

Energy bills have more than doubled in the last 5 years - if this trend continues bills would reach £4,185 a year by 2020 without taking into account additional investment costs

According to Ernst & Young, investment in Britain's energy supplies will cost £233.5 billion - this will add £548 a year onto household energy bills for the next 15 years

In 2004 the average bill size was £580. Today it is £1,239

Global demand and wholesale volatility contributed to price hikes over the last 5 years, including a 42% or £381 increase in household energy bills last year - no evidence to suggest that market volatility won't continue

Cost reductions through energy efficiency measures likely to be wiped out by growing demand for energy caused by increase in single person households, ageing population and increasing consumer reliance on electrical gadgets.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "It's great that Ofgem have released this information, but I feel that consumers are only getting half the picture. If bills rise by the amount that Ofgem suggests we will all have got off lightly. If Ofgem continues to ignore the impact of wholesale and pricing trends in these scenarios then it will be doing consumers a disservice.

"This is a wake-up call for us all though. The £5,000 a year energy bill may seem like an outside possibility, but we have to remember that energy bills doubled in the last five years alone and that the huge investment needed just to keep the lights on in Britain will alone add £548 a year onto our bills. The fact is we are entering a new era of high cost energy and households will have to adapt their behaviour accordingly.

"Consumers must now heed the underlying message that energy bills are inevitably going to rise in the medium to longer-term. My advice to consumers is to invest in making your home more energy efficient, reduce the amount of energy you use and make sure you are paying the lowest possible price for it. I would also call on Ofgem and the energy industry to start pulling together on this - there are many different projects and schemes that could play a vital role in shielding consumers from these unprecedented increases. But if they are to work efficiently and we are not to see poor and vulnerable consumers slipping through the net these projects now need to be brought together and coordinated properly so that they can make a serious impact on the issues at hand."