Domestic energy bills may jump as S&P Global Platts data shows wholesale gas and electricity prices soared in November
Domestic energy bills could be set to rise even further as new data shows wholesale electricity and gas prices sharply rose in November.
Outages at French nuclear plants, from which the UK imports power, and shrinking spare capacity margins in the power market drove up day-ahead wholesale electricity prices by 16 per cent on average last month compared to October.
Electricity prices rose from £52.79 megawatts per hour (MWh) to £61.42 MWh month-on-month and 63 per cent year-on-year.
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"Fears of nuclear-related supply shortages in France have eased in recent days on the back of warmer weather, but the risk remains of emergency measures this winter in the event of a cold snap," Platts editor Henry Edwardes-Evans said.
Natural gas almost kept pace with the electricity hike, rising 14 per cent month-on-month from 41.72p per therm to 47.73p per therm. Spot prices for next-day delivery were up 34 per cent on November 2015.
Wholesale prices have been weighing on tariffs for several months and at the end of November GB Energy, a challenger to the Big Six energy suppliers, ceased trading due to rising wholesale costs.
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"Energy bills have seen sharp rises recently as wholesale prices, which make up almost half the bill, have climbed steeply over the past few months. As a result, many suppliers have replaced their cheapest deals with more expensive plans," said Claire Osborne, energy expert at uSwitch.com.
"In the past two months alone, the cheapest deal has risen by £114 a year. Many small and medium sized suppliers have also hiked the price of their standard variable tariffs by an average of eight per cent, including Co-operative Energy, Flow and Ecotricity. The Big Six have also raised the price of their best deals but, as yet, have not raised standard variable tariffs."
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S&P Global Platts also found the UK's use of natural gas for power generation breached the 2bn cubic metre mark for the second successive month, continuing to reverse the previous process of decline. Gas-for-power demand rose seven per cent month-on-month and 69 per cent year-on-year to 2.14bn cm.
The last time UK gas-for-power demand was above 2bn cm for a calendar month was January 2011.