Predicted price rises add to pre-Budget pressure on the Chancellor

Labour’s net zero levies will become the main driver of household energy bills next year, overtaking gas prices for the first time, analysts have warned. The Telegraph has the story.

Green taxes, upgrades to the electricity grid and other government-backed charges will account for 60pc of energy bills from April 2026, Cornwall Insight said – far outweighing the actual cost of energy.

The shift undermines claims by Ed Miliband, the Energy Secretary, that gas prices are the primary cause of high bills. He has previously said that bills were high “because of our dependence on fossil fuels”.

Craig Lowrey, from Cornwall Insight, said: “Wholesale prices are no longer the main story. The real pressure is coming from rising non-energy costs, with levies and policy decisions associated with that investment in renewables driving up bills.”

Household energy bills will surge to more than £1,800 next spring, Cornwall Insight predicted, partly because of the cost of upgrading the UK’s pylons, power cables and substations.

Average household power and gas bills, currently standing at £1,755, will dip by £22 in January only to surge back to £1,808 from April, it warned.

“This [increase] is largely due to rising charges associated with the operation and maintenance of the country’s energy networks, specifically electricity transmission and gas distribution charges,” said Cornwall Insight.

“This is likely to be an enduring trend with wholesale energy prices, once the dominant driver of bills, forecast to drop to less than 40pc of the cap and remain below that threshold for the rest of the decade.”

Cornwall Insight’s forecast includes a new levy averaging £10 per household per year to subsidise the construction of the Sizewell C nuclear power station in Suffolk.

The total predicted price rises add to the pre-Budget pressure on Rachel Reeves, the Chancellor, to tackle the surging costs of Mr Miliband’s net zero crusade.

Read the full story here.