Energy boss warns of ‘catastrophic winter’ ahead for households as bills spiral

Households face a “dramatic and catastrophic winter”, a senior energy firm executive has warned ahead of the increase in the price cap on bills.

EDF managing director Philippe Commaret warned that half of UK households could be in fuel poverty in January as a result of rocketing energy prices.

His comments came as the National Grid prepared to hold an exercise to test the resilience of systems in the event of a gas supply emergency.

Consumers will find out on Friday how much the energy price cap will rise, with analysts expecting average annual bills to increase to more than £3,500.

Mr Commaret said EDF was launching a campaign to help customers cut bills with energy-saving measures but the scale of the problem meant further intervention from the UK Government was needed.

“We face, despite the support that the Government has already announced, a dramatic and catastrophic winter for our customers,” he told BBC Radio 4’s Today.

“In fact, in January half of the UK households might be in fuel poverty. That’s the reason why we want to take actions in order to do everything we can do in order to help our customers.

“So, we are announcing today that we are going to launch a campaign in order to reach hundreds of thousands of our customers to provide them further support to help them cut their costs, but also make sure that they are accessing all the available support that is available for them.”

Price cap

Regulator Ofgem will announce the new level of the price cap on Friday, with energy industry consultants Cornwall Insight warning that households will face an 80% rise in bills going into the winter period.

Energy prices are tipped to hit £3,554 from October, then rise to £4,650 from January.

So between October and April – which includes the coldest months of the year – the average household will pay an equivalent £4,102 per year for their gas and electricity.

It would be a massive jump from today’s £1,971, which is already a record, and much higher than the £1,138 seen last winter.

No immediate extra help will be announced by Boris Johnson’s Government, with major financial decisions being postponed until either Liz Truss or Rishi Sunak is in No 10 following the Tory leadership contest.

Mr Sunak has pledged to remove VAT from energy bills, while Ms Truss has promised to cut green levies.

Levers

Mr Commaret said: “I think that all ideas in order to keep the bills for customers flat are really important and have all to be considered.

“There is not only one lever to be pulled but all levers have to be pulled right now because we face a catastrophic winter.”

The war in Ukraine and the economic isolation of gas-producing Russia, combined with surging energy demand following the easing of coronavirus restrictions around the world, has driven up prices and caused uncertainty in international supply.

Downing Street has insisted there is no need for consumers to panic and “households, businesses and industry can be confident they will get the electricity and gas that they need over the winter”.

But a regular emergency planning exercise to help the UK prepare for the possibility of a shortage of gas supplies has been doubled in size, the BBC reported.

The National Grid’s Exercise Degree will examine whether firms can appropriately respond to a gas supply shortage which has electricity system implications.

The exercise will take place in two stages on September 13 to 14 and October 4 to 5 – last year’s version of the event took place over two days.

But the timetable for the event was set out in January, ahead of the Russian invasion of Ukraine, and is not related to the current energy market turbulence.