Energy prices could jump again this winter, prompting governments to step in and shield households from harsh bill rises for a second year running, experts have warned.
A harsh winter mixed with a resurgence of China’s economy could boost gas prices once again, International Energy Agency boss Fatih Birol said on Monday, pushing up bills.
Echoing similar comments from Centrica PLC (LSE:CNA) boss Chris O’Shea last week, Birol suggested that the world was not out of the energy crisis just yet, despite wholesale prices having fallen from last year’s peaks.
“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 told the BBC.
Another spike in gas prices “cannot” be ruled out, he added while urging governments to push renewables and energy-saving schemes.
National Grid PLC (LSE:NG.)’s system operating wing has already hinted that the demand flexibility service will return this winter, once again offering consumers savings if they reduce usage at certain times.
Gas, which determines other energy prices, has fallen back to July 2021 levels meanwhile – before the war in Ukraine ramped up volatility already being caused by the pandemic.
Households bills have therefore been forecast to fall further in October by consultancy Cornwall Insight, which also tipped prices would sit lower year-on-year in early 2024.
Birol warned blackouts were still a possibility though, after “strategic mistakes” in Europe saw countries having to shift away from an over-reliance on Russian energy following the start of the Ukraine war.