Energy Costs In Britain ‘Will Not Drop’

Two leading figures in the UK energy industry have said that it is “not possible” for energy costs to drop in Britain.

Speaking on Jeff Randall Live on Sky News, chief executive of npower, Volker Beckers, said costs cannot be any lower than today because commodity prices are always rising.

Mr Beckers said: “Will they (costs) be lower than they are today? That is not possible anymore.

“We see that commodity prices go up and we now reduce our dependence on commodity costs, so our dependence on gas, on coal, on oil, will go down by the day.”

Steve Holliday, Chief Executive of National Grid, which provides the backbone to Britain’s energy supply added: “In any scenario, it is hard to imagine that the costs of our energy are going to be lower than they are today.

“It is not the real world. People should be honest with consumers. Energy costs are going up.

“The challenge for the Government and industry is how to keep those cost increases as low as possible.”

Npower produces a tenth of the UK’s electricity output

Their comments come as energy regulator, Ofgem, says Britain needs £200bn worth of investment by 2020 to keep the lights on and make our energy supply greener.

That is double the rate of investment seen in the UK over the previous two decades.

In order to encourage and secure these investments, the energy bosses called on the Government to form a coherent energy policy.

Mr Volkers told Jeff Randall: “What is now needed is action. We need certainty and consistency.”

He continued: “We need to ensure that whatever we invest into, is technology which is ensuring that the industry in the UK is competitive and at the same time affordable to consumers.”

By 2020, 15% of the UK’s energy needs must be met by renewable sources such as wind and solar power to meet European directives.

Currently, sustainable energy only produces 7-8% of Britain’s energy requirements. The Government has expressed that more subsidies and green taxes are needed.

National Grid chief, Mr Holliday, explained: “We are still not getting on with energy efficiency.

He said: “The technology is there today to reduce our energy consumption of electricity and gas in this country by 25-30%.

“That is part of what we need to do in renewing and refurbishing our buildings, changing our lighting systems, changing our heating systems.

“The way in which we will keep some of these things under control is by consuming less energy ultimately.”

Source: http://news.sky.com/home/business/article/16142387