Energy bills could stay elevated all through 2024 and for the rest of the decade, according to new research from consultant Cornwall Insight.
Wholesale power prices are set to rise from an average of £96.64 per megawatt-hour so far this year to £129/MWh next year as gas prices tick up again following the war with Ukraine.
That does not include the possibility of further disruption due to the Israel/Gaza crisis currently unfolding where one gas field has already seen production temporarily halted.
Electricity prices are also forecast to be 60% higher than they were in 2021 and before the spike in prices post the pandemic.
Cornwall Insight expects electricity to average above £80/MWh.
The consultant also expects the UK to miss its 2050 renewables target, which it says will also affect prices over the longer term.
By 2030, offshore wind will make up 26% of the UK’s installed electricity capacity, or double the current level with gas dropping to 13%.
“We can see the country is travelling in the right direction towards a renewables-based electricity system. However, our estimates continue to show it is simply not fast enough to deliver on government targets,” Cornwall said.
Gas and electricity costs make up 50% of the typical household bill with the charges to pay for grid upgrades, green subsidies and for bad debts at the energy companies.