UK’S electricity prices rise fastest in developed world
ELECTRICITY prices have risen faster in the UK than in almost any other developed country since 2019, the International Energy Agency has found.
Soaring wholesale costs and an increase in net zero levies have led to British households paying more for their power, as they now face the third highest prices in Europe.
In the past year alone, the price of electricity in the UK rose by 19pc, whereas in the US, electricity prices have risen by just 5pc a year since 2019.
The IEA report said: “Retail electricity prices in the United States have increased by a 5pc yearly average from 2019 to 2023. By contrast, prices in the United Kingdom, adjusted for purchasing power parity, have increased by 19pc in the past year and doubled since 2019.”
According to a separate report from the House of Commons library, the UK’S spike has been driven by taxes and levies linked to net zero. “In the first half of 2023, taxes and levies made up 19pc of household electricity and 19pc of household gas prices on average across the EU,” the report said.
“In the UK, taxes and levies made up 17pc of electricity and 7pc of gas bills.”
The IEA report warned high electricity prices across the UK and Europe would undermine competitiveness.
“Despite an estimated 50pc price decline in 2023 versus 2022, energyintensive industries in the region continued to face far higher electricity costs compared with the United States and China in the aftermath of Russia’s invasion of Ukraine,” it said.
“As a result, the competitiveness of energy-intensive industries is expected to remain under pressure.”
A spokesman for LCP Delta, a consultancy, said: “Not only are we heavily reliant on gas for our domestic heating, but it also plays a key role in our electricity generation and sets the electricity price for the whole system. This meant that any cost increase in wholesale gas prices was felt by UK homeowners in their gas and electricity bill.”
The price rises hitting consumers also led to a record £4.1bn payout in 2023 for utility shareholders, according to the latest UK Dividend Monitor report, from Computershare.