Octopus Energy warns ‘customer pain’ set to get a lot worse next year as prices rise
Gas crisis: Expert issues warning over 'significant' price rises
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Speaking to Express.co.uk, Clem Cowton director of external affairs at Octopus Energy, warned: “High gas prices are going to continue to rise and are going to bite a lot harder next spring. The British addiction to gas is going to continue to make life very hard for households.” She warned that: “Government would need to be prepared to spread out the shared cost of supplier failures and help households out with the short term impacts of higher bills in the coming year, or customer pain will get a lot worse.” Echoing advice from Martin Lewis, she suggested those on cheap fixes ending now should let themselves be automatically moved to cheaper standard variable tariffs.
However, she warned they should then look to try and fix in April next year when the energy price cap is likely to rise considerably.
By then, lower wholesale gas prices should see a flip in the market with fixed deals once again becoming the cheaper option.
However, prices will still remain much higher overall on this year’s.
This year has been catastrophic for energy companies with nearly half of all UK energy firms going bust.
Two companies, Entice Energy and Orbit Energy left the market this week while taxpayers will bail out Bulb to the tune of £1.7bn.
With 1.7 million customers, Bulb was deemed to big to relocate customers to other providers as has previously happened.
Ms Cowton said she would be “surprised if we saw anything like Bulb happen again.”
However, she added: “I wouldn’t be surprised if some of the smaller ones continued to struggle.”
Bulb has been the largest company so far to collapse.
Most of the 24 firms to have gone bust since September have been smaller and newer entrants to the market.
Ms Cowton said: “These firms should never have been allowed to get into this state.”
A number of collapsed firms have blamed Ofgem’s energy price cap. It limits the amount which can be charged to households on standard variable tariffs.
In a statement, Orbit said: “Sadly, the UK Government and our regulator Ofgem expect us to sell energy at a price far lower than the cost to buy – which makes operating unsustainable.”
Ofgem is currently running a consultation to review potential changes to the price cap which is expected to increase in April.
However, Ms Cowton suggested Ofgem needed to prioritise improving regulation rather than just focusing on changes to the cap.
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She explained “Ofgem need to have much better capabilities on data” as well as “better rules around hedging”.
Express.co.uk has contacted Ofgem for comment.
As well as raising questions over the future of energy regulation, Ms Cowton also believes the “gas crisis has shown we’re way too exposed to gas” adding that most central heating systems are very inefficient.
Comparing heat pumps and hydrogen boilers as future options, she explained hydrogen is incredibly expensive with very little green hydrogen currently produced in the UK.
Comparing hydrogen to “dieselgate”, she predicted hydrogen would not be sustainable without Government subsidies – and that heat pumps would be the best option for affordable heat in the future.
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