Provider Warns Of Increased Energy Prices

E.ON And ScottishPower Slash Energy Prices

One of the UK's biggest energy companies has warned that the age of cheap energy prices has ended.

Npower said that unless investment of at least £200bn is made in Britain's energy infrastructure, prices will spiral, and the Government could be forced to backtrack heavily on its carbon reduction targets.

Volker Beckers, chief executive of RWE npower, told Sky's Jeff Randall Live that it was important not to sacrifice the cost of supply to reduce its carbon impact.

He blamed the recent increase in energy prices on a rise in the cost of oil and other global commodities, but said companies like npower had tried to reduce the impact on consumers.

"Energy companies have managed volatility in wholesale prices," he said.

The International Energy Agency warned oil prices could hit $150 a barrel over the next five years unless $100bn is invested every year in North African and Middle Eastern oil fields.

The Future Power report's author, Professor Samuel Fankhauser of the London School of Economics, said the Government's current investment plan for energy infrastructure would provide "a clean and secure, if somewhat expensive, energy sector".

"But it is possible that costs will spiral or investment fall short," he said.

"In addition, the Government's commitment to environmental objectives may falter."

Average household bills in the UK have risen by more than a third over the past year alone, with recent electricity and gas price rises implemented by EDF Energy, Scottish Power and British Gas.

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