EDF has leapt first at the starting gun fired for energy retailers two weeks ago, when Ofgem lifted its cap on regulated home tariffs..
The French state’s generator-retailer in the UK has signalled the permitted 12% raise in home charges will take effect from 1 October on its standard variable rates. Dual-fuel deals will then soar to an average of £1,277.
Record high prices for wholesale gas are to blame; contracts have surged by as much as 50% in only six months.
In early July, traders on the Dutch TTF hub were contracting front month deals at Euros 38.65 /MWh. Equivalent UK deals then were being struck at an unprecedented 93.35 pence per therm. Causes include consumption rebounding as lockdowns are eased, particularly in Asia, the long hangover from a cold European winter, and seasonal stock building.
In 2020 EDF UK lost £ 0.260 billion on £ 6.84 billion sales in its supplies businesses. The loss was only partially offset by £ 0.105 billion it earned from £ 3 billion of generation sales.
Just under 2 million UK homes last year bought around one billion therms of the company’s gas. Three 3 million bought its electricity. On the generation side, critics note that only a tenth of the electricity nuclear operator EDF sells in the UK is made from legacy gas.
EDF UK’s managing director of customers Phillipe Commaret said the firm would search out its customers in difficulties for help from its £1.9 million support fund.
”As a sustainable, long-term business we must reflect the costs we face,” Commaret added.
Price comparator USwitch meanwhile predicts this month’s ending of as many as 112 fixed deals by suppliers stands to pitch nearly 700,000 households towards rises averaging £275 a year.
Two weeks ago Citizens Advice warned of a coming ‘perfect storm’ of consumer debt, as energy retailers’ rises coincide this autumn with a £20 cut in Universal Credit affecting six million homes.
Campaigners predicted last month that the toll of Britain’s fuel poor could rise this winter by another 400,000 to 4.4 million households, against the usual benchmark of homes spending more than a tenth of their income on heat and light.
