EDF adds to calls for deficit fund to prevent millions falling into fuel poverty
One of the UK’s biggest energy suppliers, EDF Energy (EDF), has called for a historic Government intervention to avoid tens of millions of Brits plunging into fuel poverty this winter.
Phillippe Commaret, managing director of customers, told City PM the Government needed to think about consumers, and that rising bills risked reaching a point where they were “not bearable.”
He called on the Government to step in to protect energy users, with an expansive four-stage plan to ease energy bills.
This included VAT cuts, the £400 discount for energy users pledged by former Chancellor Rishi Sunak, a deficit tariff fund from January next year, and a nationwide insulation scheme.
Commaret warned that the UK has some of the least energy efficient housing stock in Europe, and highlighted that even simple measures such as loft insulation and cavity wall insulation could shave £600 off consumer energy bills.
EDF is the latest supplier to back a deficit fund, with Scottish Power, Octopus Energy, EON UK and Ovo Energy also supporting the concept.
This is where suppliers would freeze energy bills at their current levels for two years and take out state-backed loans from banks which would be repaid by customers.
It comes as Ofgem is set to announce the latest update to the price cap tomorrow, establishing what providers can charge customers on default tariffs from October.
Calls to cap bills have gained momentum due to a huge surge in wholesale energy prices in recent weeks, following a Russian squeeze on European gas supplies.
The price cap expected to rise to at least £3,500 per year from October, with forecaster Auxilione predicting bills could peak at an eye-watering £6,823 per year next spring.
This now likely means most households will struggle to pay bills without cutting back elsewhere.
Gas prices climbed a fifth in just a week at the beginning of August, the Office for National Statistics said yesterday.
Reflecting the scale of the crisis, Wall Street firm Bank of America warned that if the government intervened in the market and held bills at their present level of around £1,900 for two years, “support would run to £125bn,” around double the cost of the furlough scheme.
EDF is one of the UK’s big five suppliers, home to over five million customers.
Meanwhile, Harbour Energy (Harbour) has increased its share buyback programme 50 per cent to £254m yesterday, with a cash flow of £1.2bn for the first half of the year amid soaring gas prices.
This will inevitably reignite the debate over expanding the windfall tax, with Labour calling for investment relief to be scrapped.
Harbour boss Linda Cook said: “Our strategy to build a global diversified oil and gas company focused on safe operation, value creation and shareholder returns remains valid.”