Energy bills will continue to rise says OfgemFebruary 19, 2013
With the production capacity of power in the UK declining, the Ofgem chief warns that energy imports could be a factor in making energy bills increase.
Chief executive of the regulator Alistair Buchanan told the BBC that power station closures will lead to a ten per cent decrease in capacity by April.
In order to handle this, Ofgem suggests that the UK will rely on gas as a means to power the nation, with a lack of new nuclear, clean coal or carbon capture before 2020.
However, this rise could prove a positive for businesses that have solar panels installed on their premises. With bill rises comes an increase in the annual returns which photovoltaic systems can provide.
A larger take up of the solar energy generation measures means that power generated can then be fed back into the National Grid, with money being gained through the feed in tariff. The increase in demand could inflate the returns which panels can offer.
Mr Buchanan said that in five years' time, the UK will be very tight on power station capacity. He added that while it seems feasible to go shopping in wider global markets for additional supplies, these countries are also suffering from a lack of stock or generation ability to supply demand.
"There isn't a single person or people to blame. In my view it was a single event – the financial crisis. Before the financial crisis the government had backed a visionary approach to energy on wind, water and nuclear… then came the financial tsunami," the chief executive said.
In response to this issue, Mr Buchanan recommended that energy efficiency in homes should be addressed before the UK enters a crisis. This could be achieved through installing double glazing or insulation in a property.
While homeowners are unlikely to be able to install solar power systems which will provide as much income as businesses can, small scale solar energy creation can significantly cut energy bills and generate some profits.
By utilising the Green Deal homeowners can install the measures without up-front costs while still benefitting in the long term as energy prices for gas and electricity increase.
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