Power plant closures spark utility price concerns
Published On 23 October 2007
The news that British Energy is to temporarily shut down several nuclear reactors has raised the possibility that utility prices could rise in the near future.British Energy announced that the plants would be closed after routine inspections discovered corrosion.
After the closures - which will affect around a quarter of British Energy's nuclear-generated output - were announced, wholesale prices to increase by 17 per cent.
However, consumer website SimplySwitch.com said that consumers should be more concerned about changes to the price of gas.
A spokesperson from the site, Karen Darby, explained: "Those fearing higher electricity bills shouldn't be too alarmed by this announcement. Spikes and troughs occur frequently in wholesale electricity prices and they're normally absorbed by the energy suppliers.
"What's more worrying for customers, however, is that wholesale gas prices have started to creep up. With 70 per cent of UK homes connected to the gas mains, and 40 per cent of the UK's electricity coming from gas, rising wholesale prices are bad news for the entire domestic energy market.
"Some analysts are predicting that energy prices will rise by the end of the year and we are seeing more and more customers enquiring about capped energy tariffs."
Figures from Ofgem indicate that nearly three million customers have switched utility suppliers since the beginning of the year.
