Wales braces for winter energy crisis amidst rising costs and limited support, says think tank
As the cold months draw near, Wales is facing a significant challenge with its winter energy costs, according to think tank, The Bevan Foundation.
The Chancellor’s Autumn Statement, scheduled for Wednesday 22nd November, followed by Ofgem’s decision on the energy price cap on Thursday 23rd November, are pivotal moments that could shape the energy landscape for Welsh households.
Victoria Winckler, Director of the Bevan Foundation, highlights the severity of the situation.
Last winter, gas and electricity prices reached unprecedented levels, forcing 39% of people in Wales to reduce their heating.
Although there was a slight decrease in energy prices over the summer, leading to a reduction in households cutting back on heating, the sense of relief might be short-lived.
Energy prices have soared more than 50% compared to the previous year.
Current costs for gas and electricity stand at 7p per kWh and 27p kWh respectively.
This pricing translates to an annual bill of £1,923 for a typical household, a stark increase from previous years.
Ofgem’s reduction of the estimated typical household bill to £1,834, assuming lower consumption, has been criticised as misleading by Ms Winckler.
The future looks daunting, with predictions of further price increases.
Cornwall Insight forecasts a five percent rise in prices from 1st January 2024, alongside a significant hike in electricity standing charges from April next year.
This could mean households paying £4.27 a week just for electricity supply, excluding actual usage.
The discontinuation of the Energy Bills Support Scheme, which provided £400 per household last winter, adds to the crisis.
While pensioners receive some assistance through the Winter Fuel Allowance, there is no comparable support for the working-age population.
A Triple Energy Crisis in Wales
Wales is facing a triple energy crisis: high energy prices, inefficient housing primarily due to age, and low household incomes.
This combination leaves many unable to afford necessary heating, impacting their health and well-being.
Victoria Winckler said: “Too many people in Wales will be cold this winter, affecting their everyday lives as well as their health and well-being. It is a deep injustice that people in an energy-rich nation – one that produces nearly twice as much electricity as it consumes – are the least able to afford to heat their homes.”
So far, prices for the next quarter are just speculation – it remains to be seen what Ofgem will announce on 23rd November or if the Chancellor will, unexpectedly, provide some respite in the Autumn Statement on 22nd.
